Core/Semi-core EGBs are holding onto...>

BOND SUMMARY: Core/Semi-core EGBs are holding onto opening gains, curves remain

flatter, with little seen to distract escalation in US/China trade spat. ECB's

Draghi said they would take gradual approach to adjusting policy after patient

wait for first rate hike. German 10-yr Bund yield last 4.1bp lower at 0.357% and

2s/10s yield spread is 2.6bp tighter at 98.4bps. 

- EMU periphery have pared some of the opening sharp moves wider however remain

weighed by risk-off sentiment, while newswire reports that Italy may take

another year to balance the budget also seen weighing. 10-yr Bund/BTP spread is

5.6bp wider at 221.2bps while Spain and Portugal are circa 3bp wider.

- US Tsys trading near sessions highs having taken another leg higher as

European markets opened on continued risk-off flow. The belly of the curve has

experienced some slight outperformance. 10-yr note last -4.9bp at 2.867%.

- Money markets are trading higher, curves flatter on trade war concerns.

Green/Blue Euro$ are 7 to 8 ticks higher, while Euribor & Sstg are lagging at

4/4.5 ticks higher.