Bonds remain weak with curves bear.....>

BOND SUMMARY: Bonds remain weak with curves bear steepening following sharp

moves higher in JGB yields overnight in the aftermath of Tuesday's BOJ meeting.

- 10-Yr JGB yields weakened the most on the Japanese curve as markets digested

BoJ's allowance of a broader trading range - last trading at 0.131%, up 6.9bps

and just off the 0.132% high.

- US Treasuries reacted in kind, with the 10-Yr yield up 1.9bps at 2.978%; with

2s moving just 0.4bps, 2s-10s are steeper.

- Gilts are following suit, Sep8 future off 27 ticks at 122.41. Focus is on BOE

Thursday (see POV from 1839BST 07/31, 'BOE RATE HIKE NAILED ON, EYES ON R*')

- Market source noted `cheap protection` bought on a no-hike scenario at BOE:

(Dec8 99.125/99.25/99.375 Short Sterling call fly bought at 1, 14k on the day.

- Bunds also under pressure, with the Sep8 future off 39 ticks at 161.19. 10-Yr

Bund auction coming up. Periphery spreads vs Germany widening slightly, with

Italy 10s out 2.3bps and Spain out 0.8bps.

- FOMC decision later today, but with 90%-plus odds of no change in rates priced

in, focus will be on any changes in the statement.