Central bank policy is the key as......>

BOND SUMMARY: Central bank policy is the key as the market has continued to

digest yesterday's Fed rate cut. The target range was cut by 25bps with both the

IOER and ONRRP rates cut by 30bps. USTs have generally been moving a little

higher this morning, retracing some of the move lower seen yesterday.

- Elsewhere this morning the Norges Bank have hike 25bp and put a 40%

probability on further hikes. The SNB left rates on hold but tweaked their sight

deposit programme. While the BoE are due to announce policy at midday BST today

but are unlikely to make any significant changes.

- UK retail sales disappointed, but saw July data positively revised.

- There has been a divergence with between Bunds and gilts and USTs with Bunds

and gilts having moved lower through most of the morning session.

- TY1 futures are unch today at 129-12+ with 10y UST yields down -1.7bp at

1.781% and 2y yields down -0.8bp at 1.756%. Bund futures are down -0.34 today at

173.03 with 10y Bund yields up 2.3bp at -0.489% and Schatz yields up 1.5bp at

-0.721%. Gilt futures are down -0.14 today at 132.31 with 10y yields up 1.5bp at

0.655% and 2y yields up 2.1bp at 0.521%.