Markets have turned mildly risk-on.....>

BOND SUMMARY: Markets have turned mildly risk-on as momentum gathers behind a

gradual easing of lockdown measures in Europe.

- There are a slew of central bank meetings this week (US, Sweden, Eurozone).

Given the degree of stimulus recently delivered, markets seem to be more

conservative on further large scale easing measures this week. Nonetheless, some

residual probability of further stimulus on the margin could be helping the bid

in risk assets.

- USTs have traded lower with cash yields broadly up 1-4bp with the curve bear

steepening.

- Gilts have similarly weakened with yields 1-2bp higher.

- The decision on Friday by S&P to maintain Italy's credit rating at BBB has

underpinned the rally in BTPs this morning given mounting speculation that the

sovereign could have been downgraded. The short-end is outperforming with

2/3/5-year yields down 10bp.

- The data calendar is light today with just the Dallas Fed Manufacturing

Activity Index later today being the only release of note.