Bonds and rates are weaker, with US....>

BOND SUMMARY: Bonds and rates are weaker, with US Treasuries setting the tone.

- Tsys remain under pressure, with the 10-Yr at 2.888%, up 1.8bps and near the

monthly high set in early trading Thursday. Curve is bear steepening, with the

belly mildly underperforming (5-Yr up 1.9bps; 2-Yr up 1.1bps). 

- Main highlights in the US: Jobless Claims & Philly Fed Index at 1230GMT.

- In a thin day for European data, the main market mover this morning has been

UK Jun retail sales which dropped 0.5% M/M, a big miss from +0.2% expectations.

Sep8 Gilt futures jumped 10 ticks to 123.67, but since retraced to 123.62).

- Little move in Short Sterling though in the end, with near-dated futures

actually down a tick, and MNI PINCH pricing of an August BoE rate hike down only

slightly (just below 80% now). Euribor largely flat.

- In line with the US Tsy move, Eurodollar futures are sharply lower, by 2.5-3.0

ticks from Dec19 through Dec21, with the curve remaining inverted.

- Bunds have pared earlier losses but remain weaker, Sep8 future down 11 ticks

at 162.84. JGBs have traded in a tight range, Sep8 future flat at 150.94.

- EGB periphery holding in, with Bono, PGB and BTP spreads tighter to Bunds.