/GILT SUMMARY: European Commission.............>

EGBS: /GILT SUMMARY: European Commission Vice-President Valdis Dombrovskis has

warned that the excessive debt procedure is warranted for Italy in a stinging

rebuke for Deputy PM Matteo Salvini who has been particularly vocal in recent

weeks on the need to challenge EUs fiscal rules.

- Italian BTPs have been under pressure with yields broadly 7-9bp higher on the

day.

- German bunds are a touch stronger. Current yield levels: 2-year -0.672%,

5-year -0.5896%, 10-year -0.221%, 30-year 0.392%.

- UK Conservative leadership frontrunner Boris Johnson has reaffirmed his

position that the government should prepare for a no-deal Brexit in the event of

being unable to secure a better divorce deal. 

- Having initially suggested that the NHS should be on the table in any future

bilateral trade talks, US President Donald Trump has subsequently backed down

from this claim.

- Gilts have rallied through the morning with yields 3-4bp lower. Current yield

levels: 2-year 0.568%, 5-year 0.622%, 10-year 0.867%, 30-year 1.456%.