EGBs are trading weaker with the.......>

BOND SUMMARY: EGBs are trading weaker with the exception of Spain weighed by

risk ECB may announce end to its QE programme later today and better than

expected UK retail sales. German 10-yr Bund yield is 1.6bp higher at 0.498%

while curve has pivoted with 2s/10s 0.9bp steeper and 10s/30s 0.9bp flatter.

- Spain is bucking the trend with Bonos little changed and continue the trend of

re-tightening against Bunds. Short-end BTPs though have come under renewed

pressure on ECB risk. 10-yr Bund/Bonos is 2bp tighter and Bund/BTP 5.5bp wider.

- Gilts recovered lost ground ahead of retail sales data, but fell sharply as

total sales jumped 1.3% in May, thanks to warm weather and Royal wedding. 10-yr

Gilt yield last 1.5bp higher at 1.374% with yield curve bear flattening.

- There has been little impact of the fall in Bunds/Gilts on US Tsys which

remain in upper bound range having bounced of Asian lows. 2 TYU8 blocks appeared

to support the move +2.6k @ 119-07 and +5k @ 119-12. TYU8 last +'06 at 119-12.

Curve is slightly flatter as long-end outperforms.

- Sstg and Euribor strip are steady to lower/steeper led by 2/2.5 tick fall in

blue contracts, whereas Eurodollar strip is the opposite up 1/2.5 ticks