Dashed expectations for a major........>

BOND SUMMARY: Dashed expectations for a major announcement from the Bank of

Japan led to a rally in global bonds early, but higher-than-expected Eurozone

inflation data helped renewed pressure on EGBs, with USTs and Gilts following.

- BOJ came out with a decision on the dovish side shortly after 0500BST,

introducing dovish forward guidance while keeping the 10-Year JGB yield target

at about 0.00%, albeit highlighting greater flexibility.

- Long-end JGBs soared in a massive bull flattening, with 10-Yr yields dropping

6bps to 0.055%; 40-Yrs down over 12bps to 0.875%.

- Bunds followed a similar trajectory with the long end rallying, though gains

have been pared back on upside surprises to July EMU flash CPI (2.1% Y/Y vs

2.0%) and core (1.1% Y/Y vs 1.0%). 10-Yr Bund yield down 0.5bps at 0.440%,

though well off the low of 0.409% post-BOJ.

- US 10-Yr Treasury yields are down 1.9bps at 2.954%, though like Bunds off the

post-BOJ low (2.930%). PCE and MNI Chicago PMI releases up later.

- Futures strips are trading mixed, though generally a little heavier in the

short end. Blue Euribor and Eurodollar contracts are 1.0-1.5 ticks higher.