Bonds are on the backfoot this.........>

BOND SUMMARY: Bonds are on the backfoot this morning, retracing some of the

moves seen yesterday, helped by some generally positive PMI services data.

- TY1 is down 0.141 to 121.719 with 10y cash yields up 1.5bp to 2.737% and 2y

yields up 1.6bp at 2.557%.

- RX1 is down 0.19 on the day with 10y Bund yields up 2.1bp at 0.179% and Schatz

yields up 0.6bp at -0.503%.

- Gilt futures are down 0.03 on the day at 123.22 with 10y yields up 1.8bp to

1.292% and 2y yields up 1.5bp at 0.795%.

- Peripheral spreads are generally tighter on the day with Spain leading the way

with spreads to Bunds below 100bp for the first time since September.

- There continues to be focus in the market on the Greek 10y syndication with

order books now over E10bn.

- The Fed's Rodsengren, Kashkari and Barkin are all due to speak today with BoE

Governor Carney due to testify before the House of Lords and RBA Governor Lowe

due to speak towards the end of the session. On the data front, US new home

sales and the non-manuf ISM are the highlights.