Dovish comments from Fed Vice Chair....>

BOND SUMMARY: Dovish comments from Fed Vice Chair Richard Clarida and NY Fed

Chief John Williams ahead of the official blackout has raised speculation in

some quarters that the central bank could opt for a 50bp cut later this month.

Geopolitical risk continues to simmer in the background, with US President

Donald Trump announcing that an Iranian drone has been shot down near the

Straight of Hormuz.

- USTs are trading weaker this morning with yields broadly 2-3bp higher. TYU9

trades at 127-20 and has edged sideway through most of the session.

- Gilts have firmed from the open, with the curve close to flat. Current yield

levels: 2-year 0.507%, 5-year 0.517%, 10-year 0.741%, 30-year 1.373%.

- Core EGBs have rallied while political headlines have swung around BTPs.

- Bund yields are broadly 1bp lower, with the very long-end of the curve

steepening a touch.

- BTPs have sold off with the 10-year underperforming. Selling picked up after a

League official declared that most of Matteo Salvini's advisers want to force an

early election, while also stating it was hard to continue governing with 5*.