European, UK and US bonds are..........>

BOND SUMMARY: European, UK and US bonds are trading with a mild risk-off tone

following rise in geo-political tensions in Mid-East overnight with markets

attention turning to upcoming BoE monetary policy announcement and US CPI data.

- Italy BTPs reacted badly to news that former PM Berlusconi gave his blessing

for League and M5S to form a government, with 10-yr BTP yield rising 6bps at one

point before paring losses to now trade 2.3bp higher at 1.908%.

- There has also been some very large selling in front end of Euribor contracts

with markets citing talk of on-going paying in eonia/euribor behind the move (on

Italy credit risk).

- US Tsys have inched slightly higher supported by risk-off flows following

exchange of missiles between Syria/Iran and Israel. Yields are around 1bp lower

across the board in decent volume.

- Eurodollars are steady to higher led by 2 tick move in blue contracts.

- JGBs operated in a confined range, although futures moved higher in the

afternoon, perhaps aided by a strong 10-Year JGBi auction. JBM8 +2 at 150.82