Further dampening policy rate..........>

BOND SUMMARY: Further dampening policy rate expectations for this year,

Minneapolis Fed President Neel Kashkari indicated on Sunday that Fed Chair

Jerome Powell is "coming around" to the 'wait-and-see' approach before raising

the Fed Funds rate again. US TSYs are a touch softer; yields are up 1-2bp on the

day.

- The Mar-19 JGB future trades at 152.69 at the bottom of the morning range.

- German bunds trade in a tight range. The curve is slightly flatter with 2s30s

narrowing 2bps.

- French OATs have lacked direction so far with the longer end trading near the

previous close. Current yield levels: 2-year -0.464%, 10-year 0.572%, 30-year

1.536%

- Italian BTPs started the session on a weak footing but have subsequently

rallied across the curve from around 0815GMT. Yields are 8-9bps off the highs.

- Gilts sold off sharply at the open, but quickly recovered with yields now

close to Friday's close.

- Euro$ futures are broadly 0.5-3.5 ticks lower.