Bonds trading modestly higher across...>

BOND SUMMARY: Bonds trading modestly higher across the board, underpinned by

rising concerns over Chinese growth, continued impact of US/China trade tensions

and worries over European divisions on immigration and reform. Majority of yield

curves are bull flattening as long-ends outperform, with the exception of BTP

which is bull steepening.

- German Bunds opened steady but quickly found a bid as concerns of German

coalition, weak French consumer confidence, Chinese growth risks and division

within the European countries on immigration and reform. German 10-yr yield

-2.4bp lower at 0.316%. BTPs have seen a volatile morning session with 10-yr

spread to Germany currently 1.5bp wider at 256.4bps

- US Treasuries held a very tight range during Asia but then rallied higher as

European session got underway, supported by rally in Bunds. 10-yr Tsy -3.1bp at

2.846% with belly of yield curve slightly outperforming.

- UK Gilts have jumped on the back of the Bund rally but are also underpinned by

tough conditions on the high street as John Lewis warns on profits. 10-yr Gilt

is -3.8bp at 1.265%