Global bond markets remain under a.....>

BOND SUMMARY: Global bond markets remain under a bit of pressure, highlighted as

was the case last week and end-Apr by US10Y Tsys pushing through the 3.00% mark.

US Empire manufacturing and retail sales coming up later.

- For EGBs, periphery spread compression and continued Bund weakness remain the

dominant themes. Italian BTPs shrugging off (or perhaps embracing) delay in

populist government formation, rallying in early trade. Things changed at

0943BST when BTP futures were sold in size, 4.5K IKM8 @ 137.65. Jun18 BTPs off

from high of 137.77, which was up 29 ticks, to last trade 137.43, down 4 ticks.

- Nonetheless, 10Y BTP spreads over Bunds remained tighter, dropping 2.1 bps to

129.7bps, now 8-9bps off recent highs. Spain also tightening by about 1.5bps. 

- German Q1 GDP at 0.3% Q/Q missed the MNI median forecast of 0.4%, but the ZEW

survey met expectations. Bunds largely unmoved, 10Y yld up 1.1bps at 0.622%.

- Little movement in JGBs, with Jun18 futures last off 2 ticks at 150.69.

- UK labour market data came out marginally favourable but largely in line with

expectations, and Gilts are largely flat after an initial 13 tick drop

post-data. Jun18 Gilt future last up 1 tick at 121.78.