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.