BOND SUMMARY/EGB's: Government Bonds...>

BOND SUMMARY: BOND SUMMARY/EGB's: Government Bonds started the day on the heavy

side, with the move lower driven by the German Bund. The big beat in the French

Industrial Production coming at 4% YoY vs 1.6% expected and 2.1% MoM vs 0.3%

expected, as well as the German Auction weighing on the contract, set out the

selling tone at the start of the London morning session. Italian IP was also

released and despite a smaller beat, reaction were more muted, with BTP flat on

the day. The German/Italy 10yr spread hit new lows moving from 206bps to 202bps.

The expectation of possible more QE from the ECB is helping the spread of late.

Treasuries have taken their cue from EU Govies, testing 126.27+ low, but now

slightly off their worst levels with market participants awaiting Fed Powell at

13.30BST/08.30ET and 15.00BST/10.00ET

Sep Bund futures (RX) down 85 ticks at 172.36 (L: 172.17 / H: 173.08) 

Sep 10-Yr US futures (TY) down 12/32 at 126-29.5 (L: 126-27.5 / H: 127-09)