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Core bonds are on the front foot.......>

BOND SUMMARY: Core bonds are on the front foot this morning following the
release of PMI data. Following a decent French print and a mixed German report,
the pan-Eurozone PMI saw bonds spike higher across the board. The report noted
that outside of Germany and France, the rest of the EZ saw output fall for the
first time since July 2013. This was then followed up by a disappointing
inaugural UK flash PMI. On the back of the PMIs gilts are outperforming Bunds
which are outperforming USTs. We note also that the disappointing PMIs have
pushed peripheral spreads a little wider on the day.
- Looking ahead we look set for a fairly quiet European afternoon/US session
with little on the calendar. The highlight is the release of the Markit US PMI
with no Fed speakers due and the only other notable economic release the final
print of Michigan confidence data.
- TY1 futures are up 0-5 today at 129-20+ with Bund futures up 0.37 at 171.12
and Gilt futures up 0.49 at 131.93.

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