/EGBs-GILTS: France's surprise.........>

BOND SUMMARY: /EGBs-GILTS: France's surprise industrial production beat has hit

EGBs fairly hard, with more data yet to come Wednesday from the Eurozone and UK.

- French IP - not usually a major market mover - expanded at its strongest

monthly pace since Nov 2016 in May, with 2.1% M/M rise far above +0.4% exp.

- Focus soon turns to Italian IP out at 0900 and UK GDP figures out at 0930UK.

- Bear steepening in both Short Sterling and Euribor futures.

- Italy / German 10-Yr spread 3.7bps tighter at 205.1bps.

- Supply this morning: Germany sells new 10-Yr Bund; Portugal sells PGBs.

- European curves bear steepening on France data (and German Bund supply).

- Most attention later in the day falls on Fed Chair Powell's statement before

Congress; text out at 1330UK, appearance at 1500UK.

- Latest futures prices:

* Sep Bund futures (RX) down 67 ticks at 172.54 (L: 172.38 / H: 173.08)

* Sep BTP futures (IK) down 1 ticks at 137.71 (L: 137.33 / H: 137.77)

* Sep OAT futures (OA) down 60 ticks at 164.98 (L: 164.82 / H: 165.35)

* Sep Gilt futures (G) down 42 ticks at 131.28 (L: 131.15 / H: 131.32)