/GILT SUMMARY: Core EGBs are taking a..........>

EGBS: /GILT SUMMARY: Core EGBs are taking a breather following a robust rally

over the past week. Dovish sentiment may be nearing saturation point as a lot of

news has already been priced in: global trade tensions, a weaker regional growth

outlook and the nomination of Christine Legarde as President of the ECB.

- Bunds are trading mixed and close to unch on the day. Current yield levels:

2-year -0.761%, 5-year -0.651%, 10-year -0.392%, 30-year 0.205%.

- The French OAT curve has flattened with the shorter end trading weaker and

longer end yields inching lower. 2s10s and 2s30s are 1bp narrower.

- Given the positive shift in the Italian budget drama, this morning's sell-off

is likely corrective given the extent of the recent rally. Yields are 4-6bp

higher on the day.

- Perhaps reflecting a last-ditch attempt to stop the seemingly unstoppable

Boris Johnson, Jeremy Hunt has indicated he would legalise foxhunting  - a

widely unpopular policy, but one that may go down well with rural Tory members.

Gilts are trading soft. Current yield levels: 2-year 0.501%, 5-year 0.497%,

10-year 0.696%, 30-year 1.317%.