It has been a rather subdued trading...>

BOND SUMMARY: It has been a rather subdued trading session so far with volumes

light ahead of key central bank meetings over the next three days, although

there was a light relief rally in reaction to UK inflation data remaining

steady.

- UK Sep Gilt future was little changed heading into release of UK May inflation

data, but then spiked to intra-day high of 122.15 as headline CPI remained

steady at 2.4% y/y and core at 2.1% y/y. 10-yr Gilt yield -2.2bp at 1.37%.

- EGBs are trading modestly higher as well, while US Tsy have reversed weakness

seen in Asian session, riding on the back of the rise in Gilts, but markets

remain subdued and volumes light ahead of FOMC decision later today. 10-yr Bund

yield is -1.2bp at 0.479% and 10-yr Tsys -0.7bp at 2.9535%.

- BTPs got off to a very good start with yields falling sharply across the curve

but mainly concentrated in the short end, but these gains have since faded ahead

of 3-yr, 7-yr, 28-yr and 30-yr BTP supply.

- Money markets are a touch higher particularly the longer end. Green short

sterling up 1 to 2 ticks while equivalent Euribors up 1 tick.