Core bonds have been on the front......>

BOND SUMMARY: Core bonds have been on the front foot this morning.

- One of the main drivers is the nomination of various central bankers.

Christine Lagarde has been nominated to succeed Mario Draghi as President of the

ECB. Not a huge amount is known about Lagarde's views on mon pol. However, the

hawkish Weidmann had been one of the favourites and so the market is taking the

Lagarde nomination as a less hawkish option. In the US, President Trump has

nominated both Christopher Waller and Judy Shelton for the vacant Fed board

seats - again both of these members are expected to be dovish.

- The Lagarde announcement has helped see all peripheral spreads narrow but the

biggest movers have been BTP-Bund spreads which are now close the their lowest

levels since May 2018. The possibility of the EDP being enacted has fallen

despite sources stories from Bloomberg this morning reporting that Italy has not

committed to a 2020 deficit target in a letter to the EU.

- European services PMIs were mixed. ADP/factory orders are the US data focus.

- TY1 futures are up 0-5 today at 128-09+, Bund futures are up 0.44 at 173.79,

Gilt futures are up 0.49 at 132.06 and BTP futures are up 1.31 today at 137.92.