EGB/Gilt: EGBs and gilts have been.....>

BOND SUMMARY: EGB/Gilt: EGBs and gilts have been dominated by PMIs this morning.

The German PMI was generally better than expected, the French PMIs were mixed

and outside the big two, the Eurozone PMI pointed to stagnation. However, the

bigger market mover was the UK PMI. Although the headline numbers and the

details were all better than expected, gilts hit new highs shortly after the

release. Since then, we have retraced some of these gains and gilts and Bunds

are now a little lower than yesterday's close.

- Looking ahead there are regional elections in Italy over the weekend which

will get some attention in particular Emilia Romagna which is a traditional

stronghold of the left which may see a right-wing candidate prevail. BTP spreads

are little changed at the time of writing.

- Greece is also in some focus ahead of the rating announcement from Fitch

today. 10y spreads to Bunds have narrowed 3.0bp on the expectation that the

outlook may be upgraded to positive from stable while retaining its BB- rating.

- Gilt futures are down -0.12 today at 133.96 with Bund futures down -0.27 at

172.76, BTP futures down -0.15 at 144.12 and OAT futures down -0.24 at 165.22.