Government bonds have been bid.........>

BOND SUMMARY: Government bonds have been bid across the board, including

periphery EGBs  with the exception of Italy that came to the market with supply

of E7.5bn this morning.

- USTs started on a strong footing and have firmed through the European morning

session. Cash yields are now 1-3bp lower.

- It is a similar story for gilt with yields uniformly 2bp lower across the

curve.

- The bund curve has slightly bull flattened with the 2s10s and 2s30s spreads

~1bp narrower. 

- US President Donald Trump's press conference concerning China later today is

receiving interest. We have no fixed time yet. There is speculation that new

trade restrictions against China could be unveiled. 

- Revised data published this morning show the Italian economy contracting at a

faster pace in the first quarter than initially estimated (-5.3% Q/Q vs -4.%).

- Focus later today shifts to the MNI Chicago PMI for May, Uni. Michigan

Consumer Confidence for May and Canadian GDP.