Core bonds are lower this morning......>

BOND SUMMARY: Core bonds are lower this morning with Treasuries grinding lower

overnight while Bunds saw a bounce just ahead of the European open and remain

off their lows but have been moving lower again since the open. Gilts have been

moving lower since the open too. The moves lower are largely on optimism of a

decently sized fiscal stimulus package in the US and to a lesser extent Italy

(where mortgage payments have been paused).

- 10-year yields are up just over 18bp for both USTs and gilts while they are up

14.5bp for Bunds. 2-year yields have risen less so as the curve has steepened.

The 10s30s curve is a little more mixed with the curve steady for USTs and

steepening a little for gilts and Bunds.

- Peripheral spreads and yields have come in substantially today, led by BTPs.

10-year yields are 36.5bp lower and spreads 26.6bp tighter at writing.

- The focus will turn to the formal announcement of exactly what fiscal measures

will be formally adopted with Trump due to announce later today.

- TY1 futures are down -0-71+ today at 137-07 with Bund futures down -1.80 at

176.43 and Gilt futures down -1.78 at 136.86.