Core fixed income has been under a.....>

BOND SUMMARY: Core fixed income has been under a little pressure this morning as

a modestly risk-on atmosphere has also seen equities move moderately higher.

- The big story in fixed income this morning has been the move in Australian

ACGBs with the 10y yield spiking around 7bp higher close to the London open.

There was no clear catalyst for the move but some trading desks have suggested

that someone got caught long pre hedging and had to drop their duration in to

the Australian close.

- Preliminary CPI data is the highlight for EGBs this morning with Spanish and

Italian inflation data both coming in a bit softer than expected while German

state CPIs have also been a little soft. German retail sales and unemployment

data were marginally better than expected. In the UK, the second print of Q2 GDP

was in line on a Q/Q basis but saw Q1 revised higher.

- Later today we will get the confirmation of the national German inflation

print and in the US, the MNI Chicago PMI.

- TY1 futures are down -0-8+ today at 130-04 with Bund futures down -0.28 at

173.93 and Gilt futures down -0.10 at 133.98.