EGB/Gilt: It has been a heavy day of...>

BOND SUMMARY: EGB/Gilt: It has been a heavy day of supply so far with Spain,

France and the UK all conducting issuance this morning.

- The main story of the day has been the speech by outgoing BoE Governor Mark

Carney. He said that the BoE had policy space to deal with another recession and

there were underlying dovish tones through the speech. Gilts and the short

sterling curve both moved higher, particularly focusing on the fact that to ease

effectively when close to the zero-bound, easing should be carried out earlier

than in "normal" times. However, in spite of the move higher, gilt futures

failed to move above yesterday's Us-China pre de-escalation levels.

- In Europe, the main story has been that the EFSF has formally approved the

reduction of step-up interest margins for Greece.

- Gilt futures are down -0.10 today at 131.46 with 10y yields down -1.6bp at

0.800% and 2y yields down -6.1bp at 0.562%. Bund futures are down -0.47 today at

171.31 with 10y Bund yields up 1.3bp at -0.197% and Schatz yields up 0.5bp at

-0.610%.  BTP futures are up 0.19 today at 142.84 while OAT futures are down

-0.34 today at 163.79.