EGB/GILT: European govvies have........>

BOND SUMMARY: EGB/GILT: European govvies have traded slightly firmer today while

equities have inched higher and oil has dipped. 

- Gilts sold off early into the session but have recovered through the morning

and now trade close to unch on the day.

- Bunds are bid with cash yields around 2bp lower. 

- OATs have slightly outperformed, particularly in the belly of the curve.

- BTPs trade broadly in line with core EGBs with yields similarly 1-2bp lower.

- While the recovery initiative proposed by the EC yesterday has been viewed

positively, prolonged and potentially fractious negotiations now wait. Member

states will need to reach consensus on the amount of funding available, the

balance of grants versus loans, the mechanism for deciding on how to allocate

funds across the bloc and how the money will be repaid in the future. Although

the EU is well known for reaching compromise solutions, delays are likely. 

- Regional German CPI data for May shows broad deceleration from the previous

month, while the preliminary Spanish print pushed further into deflation

territory.