Bond markets have broadly traded.......>

BOND SUMMARY: Bond markets have broadly traded weaker, with the hefty rally in

Italian BTPs being the notable exception.

- UST yields are 1-2bp higher on the day with the curve trading close to flat.

- Expectations of a more market-friendly government taking over in Italy has

driven the bid in BTPs. Today's auction could be heavily oversubscribed. Price

action is strongest at the longer end with the curve bull flattening. The

30-year benchmark yield is 15bp lower on the day and the 2s30s spread has

narrowed 8bp.

- The fallout continues from UK Prime Minister Boris Johnson's decision to

prorogue parliament. Speculation is building of a confidence vote, a legal

challenge and the possibility of fast-tracked anti-Brexit legislation aided by

the Speaker John Bercow. Gilts trade close to unch this morning. 

- German regional inflation data for August has weakened compared to the

previous month. Current bund yield levels: 2-year -0.896%, 5-year -0.8895%,

10-year -0.699%, 30-year -0.1997%.