EGB/Gilts: The Bund and gilt curves....>

BOND SUMMARY: EGB/Gilts: The Bund and gilt curves have bull flattened on the

back of continued global risk-off sentiment, with trade talks still simmering in

the background and the situation in Hong Kong continuing to escalate. Sentiment

has not been helped by a big miss in the German ZEW (although we do caution that

the ZEW can often seem to be led by equity markets). UK labour market data was

better than expected, with wages growing particularly well, but this was not

enough to improve sentiment.

- Yesterday Italian Senate leaders could not agree a date for the confidence

vote. There is another opportunity to set the date today with August 20 being

touted as a possible date. BTP spreads are marginally tighter today, with other

peripheral spreads generally a tad tighter too.

- Bund futures are up 0.21 today at 177.65 with BTP futures up 0.64 at 138.62

and OAT futures up 0.25 at 168.87.

- Gilt futures are up 0.15 today at 134.48 with 10y yields down -1.5bp at 0.473%

and 2y yields down -0.6bp at 0.430%.