EGB/GILT: It has turned slightly.......>

BOND SUMMARY: EGB/GILT: It has turned slightly risk off this morning with gilts

and bunds rallying alongside periphery EGBs trading weaker and a correction for

equities and oil.

- The gilt curve has marginally bull flattened with the 2s10s spread 1bp

narrower.

- The short end of the bund curve has been relatively anchored while the

longer-end has rallied. The 30-year benchmark yield is down 2bp on the day.

- BTPs have sold off and the curve has bear steepened. Cash yields are 1-4bp

higher across the curve.

- Supply this morning came from Germany (bund, E2.49bn), Netherlands

(DSL,E2.81bn), Belgium (TCs, E2.58bn), Spain (letras, E6.89bn), Finland (bills

E1bn) and the ESM (bills, E1.50bn).

- Data this morning showed a worse than expected contraction in German exports

for April (-24.0% M/M vs -15.6% survey), while revised first quarter GDP for the

eurozone was marginally better (-3.6% Q/Q vs -3.8% survey).