Further raising hopes of a trade.......>

BOND SUMMARY: Further raising hopes of a trade settlement with China, US

Treasury Secretary Steven Mnuchin has indicated that talks with Beijing have

been productive.

- While congress has passed the spending bill to avert another government

shutdown, US President Donald Trump may yet declare a state of emergency to

secure additional funding for the contentious border wall.

- US TSYs have been relatively quiet this morning with yields close to unch on

the day. Current yield levels: 2-year 2.493%, 10-year 2.648%, 30-year 2.984%.

- The JGB Mar-19 future trades at 152.85 near the top of the day's range.

- German bunds now trade flat on the day with little change in the curve. 

- The French OAT curve has steepened, driven by the long end. The 2s30s spread

has pushed up to 198.2bps from 196.3bps.

- Italian BTP yields are ~5-6bp higher across the curve

- The gilt market appears to have shrugged off PM May's parliamentary defeat

yesterday. Current yield levels: 2-year 0.728%, 10-year 1.151%, 30-year 1.674%.

- Euro$ futures are broadly flat/1.0 ticks lower.