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EURJPY TECHS

Bears Pause For Breath

USDJPY TECHS

Support Remains Exposed

US TSY FUTURES

Poised to Extend Midday Lows

BOND SUMMARY
BOND SUMMARY: Core bonds have been on the rise through the European morning
session as data has confirmed that the German economy contracted in the second
quarter.
- Bunds have underperformed USTs this morning but Bund futures have made new
highs (Bund cash yields making record lows).
- USTs have retraced over half of their peak to trough losses of yesterday while
gilts are trading close to levels seen when the US-China tariff news hit the
wires yesterday.
- BTP-Bund spreads are marginally wider on the day. Yesterday it was confirmed
that Conte would appear before the Senate on August 20 and potentially face a
confidence vote. Salvini has also confirmed that he would appoint Giancarlo
Giorgetti as FinMin.
- UK CPI data came in stronger than expected, rising to 2.1%Y/ Y (exp 1.9%) but
with the BoE's actions conditional on Brexit there was little market reaction.
- TY1 futures are up 0-7 today at 130-01+ with Bund futures up 0.26 at 177.94
and Gilt futures up 0.19 at 134.49.