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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.

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