EGBs are trading modestly higher.......>

BOND SUMMARY: EGBs are trading modestly higher with the exception of BTPS which

are outperforming its neighbours and trading sharply higher as market continues

to digest ECB GC dovish taper. German 10-yr yield is -2.5bp at 0.401% with the

yield curve seen pivoting with 2s10s 2.4bp flatter and 10s/30s 0.3bp steeper.

- BTPs continue to find decent support following ECB decision with 10-yr

Bund/BTP spread 11.1bp tighter at 220bps, while yield on the 2-yr has dropped to

0.598% and in-turn bull steepening the yield curve.

- US Tsy have pretty much given up all their gains seen during the start of EU

session, but remain modestly higher compared to Thur close, underpinned by

downgrade of inflation assessment by BoJ and rise in global trade risks as Trump

is reported to hit China with $50bln in tariffs. UST 10-yr -0.9bp at 2.926%.

- Gilts are underperforming both Bunds and US Tsys having reversed earlier gains

as a report shows Q1 labour costs rising at fastest pace in 2.5-yrs. 10-yr Gilt

is -0.3bp at 1.327%, curve pivots as short/ultra long-end seen weighed 

- Mixed bag in money markets, with Sstg little changed, Euro$ steady to 2 ticks

higher & curve flatter, and Euribors steady to 4.5 ticks higher curve flatter