Following yesterday's poor earnings....>

BOND SUMMARY: Following yesterday's poor earnings data out of the US, it has

been relatively quiet so far this morning. UK retail sales surprised higher in

June, while comments from the EU's chief Brexit negotiator Michel Barnier moved

the meter in sterling. Geopolitical risk continues to simmer in the background,

with Iran stating that it has the capability to close the Strait of Hormuz if

necessary.

- USTs trade a touch weaker this morning. Current yield levels: 2-year 1.818%,

5-year 1.818%, 10-year 2.052%, 30-year 2.566%.

- EGB curve has broadly flattened this morning.

- The very long-end of the bund curve has outperformed. The 2s30s spread is

2.4bp narrower.

- This morning's French OAT auctions were well covered. The curve is similarly

2-3bp flatter.

- The trickle of Brexit-related headlines (Barnier comments, Jeremy Hunt's

warnings about no-deal Brexit and the Irish PM indicating that the UK can ask

for an extension) has had limited impact on gilts.