- Having traded sideways in the........>

BOND SUMMARY: - Having traded sideways in the early hours, US TSYs have recently

rallied. The 2-year benchmark trades at 2.785% down from a high of 2.798% while

the 10-year yield has edged down to 3.043% from 3.068%.

- The Dec JGB future trades at 151.04 off a high of 151.06.

- German bunds have rallied with outperformance at the longer-end causing the

curve to flatten. The 2s10s spread has narrowed to 94.8bps from 95.99bps.

- French OAT yields have similarly pushed lower, with the 3-year benchmark

underperforming the curve.

- It has been a volatile start for Italian BTPs. The 10-year yield surged to a

high of 3.715% from a low of 3.576% and has pulled back to 3.634%.

- Gilts initially rallied but have since given back the early gains. Yields are

now a touch above opening levels.

- Euro$ futures are down 0.5 ticks in whites/reds and flat to 0.5 ticks higher

in greens/blues. The Euribor futures strip is broadly 0.5-1.0 ticks lower.