European government bonds are trading mixed....>

EGBS: European government bonds are trading mixed after opening slightly heavy

on the back of weak US Treasuries overnight. The 2-yr sector in majority of

countries appears to be outperforming the rest of the curve in turn steepening

the yield curve. German 10-yr Bund yield is 0.4bp higher at 0.381%.

- There was little data or fresh news on the global trade spat between US and

China and so markets traded in slight risk-on tone during Asia which saw US Tsys

slip lower.

- Tsy turned around though just before European session got underway and

squeezed higher following a 5k TYU8 block, that appeared to be a buy.

- French manufacturing confidence surprised the market remaining steady at 110

for June. Little further data from the Eurozone today, however there are Spain

and French bond auctions for up to E15.5bln, ECB Weidmann speaks in Paris this

morning and ECB Nouy speaks in Amsterdam in early afternoon.

- EMU periphery are currently trading in-line with moves in German Bunds with

10-yr spreads currently little changed