European government bonds have opened on the...>

EGBS: European government bonds have opened on the back foot taking cue from

falls in JGBs and US Treasuries overnight. Yield curves are steeper as long-end

comes under most selling pressure while the short-end remains anchored. German

10-yr Bund yield is 1.8bp higher at 0.462% with 2s/10s 1.5bp wider.

- JGBs sold off sharply overnight with no real catalyst seen, but markets

appeared to be testing the upper range of what the BoJ will allow yields to

fluctuate by, following the announcement yesterday.

- US/China trade dispute continues to be in the headlines with latest being that

Trump is thinking of 25% tariffs on $200bln of Chinese imports rather than 10%,

with talks between the 2 countries showing little progress.

- EMU periphery are fairing slightly worse than German Bunds, with BTPs the

leading the underperformance. 10-yr Bund/BTP spread is 2.6bp wider at 230.3bps

- Main event in the Eurozone today will be release of manufacturing PMIs and

German 10-yr Bund supply.

- Euribor futures are steady to lower, strip steeper as blue contracts fall by 1

to 1.5 ticks, while whites are little changed.