Core bond markets seem to be more......>

BOND SUMMARY: Core bond markets seem to be more positively correlated with

equities today as risk remains on a positive footing with Treasuries, Bunds and

gilts all lower on the day.

- Peripheral spreads are generally a little tighter on the day, although BTP

spreads are largely unchanged with today's 10-year syndication. Record sizes for

a single tranche BTP offering have been seen with the book size of EUR100bln

reporting in the last update. We would expect to see at least EUR10bln issued.

- Later today we will see ADP employment as well as US non-manufacturing ISM and

the final print of durable goods. European markets continue to look forward to

tomorrow's ECB meeting.

- TY1 futures are down -0-6+ today at 138-21 with 10y UST yields up 2.3bp at

0.709% and 2y yields up 0.3bp at 0.167%.

- Bund futures are down -0.32 today at 171.54 with 10y Bund yields up 2.8bp at

-0.389% and Schatz yields up 1.4bp at -0.652%.

- Gilt futures are down -0.34 today at 136.58 with 10y yields up 3.0bp at 0.250%

and 2y yields up 1.7bp at -0.16%.