EGB/GILT: After a decent sell off......>

BOND SUMMARY: EGB/GILT: After a decent sell off through the morning session on

the back of better than expected French and Italian IP and UK GDP data, gilts

and EGBs have reversed some of their losses on the back of the opening statement

of Powell's testimony.

- Powell's testimony stuck to the tone of the June FOMC meeting and markets have

once again started to price in a small probability of a 50bp cut in July

(previously a 25bp cut was not quite fully priced). At the time of writing he is

participating in the Q&A.

- Looking ahead we receive final prints of many European CPIs tomorrow, but the

release of US CPI may be more important for European markets once again.

- Gilt futures are down -0.43 today at 131.27 with 10y yields up 3.6bp at 0.755%

and 2y yields up 2.2bp at 0.562%.

- Bund futures are down -0.76 today at 172.45 with 10y Bund yields up 4.9bp at

-0.307% and Schatz yields up 0.6bp at -0.738%.

- BTP futures are down -0.07 today at 137.65 with 10y yields unch at 1.731% and

2y yields up 1.2bp at 0.085%.