Retracement is the name of the core....>

BOND SUMMARY: Retracement is the name of the core bond game this morning.

Despite the US Treasury formally naming China as a currency manipulator,

Treasuries and gilts are both down on the day. Bund futures are up, but will off

of the highs seen yesterday.

- The only significant data of the day was German factory orders which were

better than expected, rising 2.5 M/M in June (consensus +0.5%) while there were

upward revisions to May's numbers. There was very little market reaction and

until Friday we don't really see any more top tier data.

- Focus will continue to remain on headline trading the US-China trade

headlines.

- TY1 futures are down -0-7+ today at 129-19+ with 10y UST yields up 5.3bp at

1.762% and 2y yields up 2.7bp at 1.602%.

- Bund futures are up 0.22 today at 176.44 with 10y Bund yields down -1.0bp at

-0.527% and Schatz yields down -0.2bp at -0.819%.

- Gilt futures are down -0.16 today at 133.94 with 10y yields up 1.0bp at 0.521%

and 2y yields up 1.3bp at 0.439%.