It has been risk-off all morning,......>

BOND SUMMARY: It has been risk-off all morning, with a combination of Italian

political concerns, a renewal of US-China trade tensions, weak data, and

emerging market assets under pressure. Big rally in safe-haven instruments, with

10Y Bund yields down 4.9bps to 0.511% and US 10Y Tsys down 4.4bps to 3.016%.

- Tuesday's post-European holiday relief rally has proved fleeting for Italian

bonds, which have reversed yesterday's gains and then some on further

uncertainty over the next Prime Minister, and dampened risk sentiment on weak

eurozone flash PMI figures. 10Y BTP yields are up 9bps to 2.428%, with the

spread over Bunds hitting a fresh 11-month high of 193.5bps at one point, now a

little lower at 191.0bps.

- In addition to the broader safe-haven bid, UK Gilts rallied in anticipation of

the April inflation data release which turned out on the weak side, though have

steadied since the release. Jun18 futures last up 68 ticks to 122.09.

- JGB futures followed their global peers higher in the morning Asia session,

although they operated in a tight range, and extended on their gains in

afternoon dealing to last trade 11 ticks higher at 150.89.