Bonds have been on the front foot......>

BOND SUMMARY: Bonds have been on the front foot this morning in risk-off

sentiment on delayed reactions to overnight headlines that there will be no more

US tariff reductions this year and that Phase 2 won't be completed until after

the November election at the earliest.

- This has been the main driver for USTs and Bunds to move higher. Today also

sees another heavy day of EGB issuance with a 30y BTP syndication, 10y Belgian

syndication as well as a 30y Bund auction.

- Elsewhere gilts opened higher and have continued to move higher as Saunders

(who has already dissented in favour of a cut) hinted that more aggressive

action may be needed with further cuts possible. This was then followed up by a

soft CPI print. Gilts have been the clear outperformers with the curve bull

flattening. The short sterling strip has also seen a substantial move higher.

- TY1 futures are up 0-6+ today at 129-11 with 10y UST yields down -1.9bp at

1.793% and 2y yields down -0.9bp at 1.563%. Bund futures are up 0.42 today at

171.43. Gilt futures are up 0.77 today at 133.18 with 10y yields down -6.7bp at

0.652% and 2y yields down -3.8bp at 0.451%.