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EGBs are trading modestly lower at......>

EGB SUMMARY
EGB SUMMARY: EGBs are trading modestly lower at start of Thursday's trade seen
weighed by overnight comments from Fed's Williams, in-line China Caixin service
PMI, EGB long-end bond supply and BoE policy announcement.
- Long-end is currently under the most pressure with German 10-yr and 30-yr
yields nearly 1bp higher.
- US Treasuries bounced off NY closing levels at start of Asian session
supported by block buy in 10-yr Tsy future but then traded sideways until start
of London trade.
- Fed Williams said that despite his frustration with inflation it would be
appropriate to start reducing Fed balance sheet in September and sees 1 more
rate hike this year and 3 in 2018.
- Looking ahead to today, there are the final service PMIs from France, German
and Eurozone, followed by bond supply from France and Spain, before attention
turns to BoE decision and press conference.
- German/Spain 10-yr spread is 1.3bp wider at 98.5bps as markets continue to
build in concessions ahead of long-end supply.

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