/EGBs-GILTS: A renewed risk-off move...>

BOND SUMMARY: /EGBs-GILTS: A renewed risk-off move had Bunds and Gilts on the

front foot, but this has reversed. Periphery spreads a little wider. Main driver

for risk-off has been Sino-US tensions and U.S. earnings results casting doubt

on the rally. But no obvious trigger for core FI reversal.

- With European equity markets down 1.5-2.3%, macroeconomic data has been

mixed-to-solid but has not stemmed the rout in sentiment.

- Biggest data day of the week, and better than expected readings: UK retail

sales beat expectations in June, as have German and French flash July Svcs PMIs

(though Mfg mixed, w Germany a little better than survey; France missed).

- Italy July sentiment a little on the weak side.

- ** Latest levels:

* Sep Bund futures (RX) down 10 ticks at 176.62 (L: 176.62 / H: 176.98)

* Sep Gilt futures (G) up 4 ticks at 138.26 (L: 138.26 / H: 138.46)

* Sep BTP futures (IK) down 26 ticks at 146.9 (L: 146.86 / H: 147.21)

* Sep OAT futures (OA) down 14 ticks at 168.33 (L: 168.3 / H: 168.64)

* Italy / German 10-Yr spread 1.6bps wider at 148.1bps