Bonds have pared back some of..........>

BOND SUMMARY: Bonds have pared back some of Wednesday's gains, despite US trade

concerns and continued Italy uncertainty.

- Italian BTPs remain the one to watch today, though there has been significant

relief since the 11-month high spread of 10s vs Bunds of 195.8bps hit yesterday,

last 180.8bps. In particular, news that the finance minister may be the more

moderate Luigi Zingales of U Chicago, rather than eurosceptic Paolo Savona.

- Bund futures have sold off on the risk-on tone, with Jun18s down 35 ticks.

- Markets still digesting Wed`s FOMC minutes, which basically confirmed a June

rate hike, while also pointing to an IOER increase. 10-Yr Tsy again pushing back

above 3.00%, last 3.012%, up 1.8bps, but still 1bps below pre-minutes level.

- Gilts fell to intra-day low of 122.00 in reaction to better-than-expected rise

in UK retail sales for April, but have recovered to 122.13. UK Debt Management

Office (DMO) will re-open the 20-Year 0.125% Nov-2036 I/L Gilt on Thursday for

Stg1.0bln this morning, results after 0930GMT.

- The JGB curve flattened as the super-long end outperformed. 10Y futures 4

ticks lower at 150.81.