EGBS/GILTS: Periphery EGB spreads......>

BOND SUMMARY: EGBS/GILTS: Periphery EGB spreads have tightened sharply Wednesday

amid a decidedly risk-on session, while Gilts and Bunds are trading weaker.

- Sino-U.S. trade talk headlines set the risk-on tone early, Brexit optimism and

solid Eurozone services PMIs (Italy at 53.1 in March) have contributed.

- Jun 19 Bund future is down 76 ticks at 165.35, with equivalent Gilt future is

down 91 ticks at 128.42.

- 10-Yr segments in both cash curves underperforming: German up 5.2bps at 0.003%

(back into positive territory); U.K. up 7.7bps at 1.081%.

- Poor UK services PMI helped boost Gilts briefly but overall risk-on tone on

cross-party Brexit talks have kept the pressure on.

- Periphery EGB yields are a little lower but the Bund sell-off has tightened

spreads: 10-Yr Italian BTPs vs Bund spread is down 6.9bps at 250.5bps, with

Greece in 8.3bps. Spain and Portugal spreads 3-4bps narrower.

- Short-Sterling futures are weaker across the strip, with losses focused in

Blues down 7.5-8.0 ticks; Euribor Blues down 4-4.5 ticks.

- Brexit headlines worth watching rest of day; ECB's de Cos speaks at 1800BST.