/EGBs-GILTS: Risk appetite is..........>

BOND SUMMARY: /EGBs-GILTS: Risk appetite is recovering slightly early Tuesday as

equities claw back losses, with Italian BTPs soaring.

- Jun19 BTPs soared 100+ ticks to new contract high at 131.71. 10-Yr spread to

Bunds 2.5bps tighter at 273.6bps, reversing earlier widening.

- Salvini set a 15-day deadline on achieving his legislative priorities with

5Star which could portend early elections. Though Salvini on local radio said he

has "no intention of making the government collapse" and wants the coalition

with the Five Star Movement to go forward "if it takes action."

- Repubblica reported European Commission could launch procedure against Italy

over its debt as soon as Wednesday, though would have to be confirmed Jul 9.

- Eurostoxx back flat; U.S. equity futures in the green; EUR stronger.

- Data-wise, Eurozone May flash inflation (1000UK) is the highlight.

- Latest EGB/Gilt futures prices: 

* Jun Bund futures (RX) up 18 ticks at 168.55 (L: 168.39 / H: 168.61)

* Jun OAT futures (OA) up 19 ticks at 164.72 (L: 164.5 / H: 164.78)

* Sep Gilt futures (G) up 7 ticks at 130.03 (L: 129.93 / H: 130.15)