EGB/Gilt: Bunds and gilts moved........>

BOND SUMMARY: EGB/Gilt: Bunds and gilts moved higher through the Asian and early

European sessions, peaking shortly before the release of the French PMI.

Services came in a bit better than expected and manufacturing fell back below

50, and below the Bloomberg survey, but the number was still not bad enough for

market participants who had pre-positioned for a disappointing release. Fixed

income took another leg lower at the German manufacturing PMI beat expectations

by 3 points. However, this was partly driven by an increase in pipeline times -

something normally associated with a boom but in this case associated with

supply chain impacts from China. Despite this wrinkle, the numbers were still

overall slightly positive.

- The UK PMI also saw a beat for manufacturing (although with the same caveats

as the German numbers) while services were in line with expectations. Gilts are

underperforming Bunds but both are comfortably underperforming Treasuries.

- TY1 futures are up 0-6+ today at 131-20+ with Bund futures unch at 174.96 and

Gilt futures unch at 134.20.