BTPs have been the main movers in......>

BOND SUMMARY: BTPs have been the main movers in fixed income space. Following

yesterday's decision by the constitutional court that the referendum on

electoral law changes would not proceed, BTPs have found a bid. These changes

would have seen Italy's parliament elected via a first past the post (FPTP)

system, similar to the UK, rather than part proportional representation (PR) and

part FPTP. If the referendum was not ruled out, it could have strained relations

in govt further. 10y BTP spreads are around 5.7bp tighter on the day.

- Gilts have also been on the front foot today, benefitting from some dreadful

UK retail sales. We do not think this will really shift any policymakers who

were on the fence about whether they should vote for a cut or not, given the

timing and volatility of the release. However, the market has moved higher with

the curve bull steepening.

- Bunds and Treasuries started the day a little soft but have since recovered

losses and trade largely unch on the day.

- TY1 futures are up 0-0+ today at 129-05+ with Bund futures down -0.01 at

171.71 and Gilt futures up 0.25 at 133.67.