Bond markets has seen a mild return....>

BOND SUMMARY: Bond markets has seen a mild return to risk-on sentiment with no

new update on US/China trade spat and news that Germany & France have agreed on

a budget for the Eurozone and embark on a 'new chapter' for the EU.

- German 10-yr yield is 0.3bp higher at 0.376% with the belly of the yield curve

seen underperforming the wings so far. Comments from Villeroy and Nowotny have

been on similar lines to that said at last weeks ECB press conference.

- EMU periphery have got off to a good start supported by comments from Merkel

and Macron. 10-yr Bund/BTP spread is 2.6bp tighter at 215.7bps.

- US Tsys are mixed with 5-yr to 7-yr slightly lower but 30-yr sector seen

enjoying a slight rally and in-turn flattening 5s/30s by 1.1bps. 10-yr Tsy yield

+0.2bp at 2.898%.

- Gilts also trading a little heavy led by the long-end of the curve with

attention on this afternoon's key vote on the EU Withdrawal Bill in House of

Commons. 10-yr Gilt last +0.7bp at 1.287%

- Money markets have come under modest pressure so far Wednesday. Green and Blue

Euro$ are 0.5 to 1 tick lower while Euribors are steady to 0.5 tick lower