German FI higher; Schatz +3.5, Bobls +15.0,....>

EGBS: German FI higher; Schatz +3.5, Bobls +15.0, Bunds +38.

- Bund futures tagged a fresh all time high overnight. The space was initially

supported by the escalation in Sino-U.S. trade matters & then by news of an

impending announcement from the U.S. President re: EU trade, although this faded

as the matter is seemingly an opportunity to formally announce a deal to open up

the EU to more beef exports after the bloc carved out quotas from other nations

earlier this year, per BBG sources.

- BTPs widened vs. Bunds on Thursday, on gov't friction. This is set to continue

after a Corriere interview with Italian Dep PM Salvini saw him suggest that the

gov't needs to pass tax cut legislation or else an early elex is required.

- Focus also seen on 10-Year EUR swap rates, which turned -ve for the 1st time.

- Also worth revisiting our latest ECB sources piece: "The ECB is readying a

tiered cut in its deposit rate in Sep, in a move which could increase the impact

of promises of possible future easing, but preparations for other potential

measures such as QE are still ongoing amid disagreements on the Gov. Council."

- EZ retail sales headlines the regional docket today.