EGB/GILT: Following a weak start.......>

BOND SUMMARY: EGB/GILT: Following a weak start EGBs have posted incremental

gains through the morning with yields now near yesterday's closing levels. 

- Data published this morning show the German economy contracting by 2.2% Q/Q

during the first quarter and Eurozone GDP falling 3.8% over the same period.

- A draft document obtained by Bloomberg indicates that Italy will allow free

movement inside regions from May 18 and between regions from June 3. 

- Gilts have firmed with the curve now trade close to unch on the day. Current

yields: 2-year -0.052%, 5-year 0.034%, 10-year 0.191%, 30-year 0.577%.

- Bund yields have inched lower with the curve trading flat.

- OATs trade unch on the day. Current yield levels: 2-year -0.558%, 5-year

-0.425%, 10-year -0.054%, 30-year 0.694%.

- BTPs have traded weaker with the short-end marginally underperforming and the

curve bear flattening. The 2s10 spread is 2bp narrower.