Sovereign Bonds are trading modestly...>

BOND SUMMARY: Sovereign Bonds are trading modestly lower and are at or close to

session lows, weighed by expectation that the ECB could start rising rates

earlier than initially thought following a Bloomberg ECB sources story. 

- German Bunds have extended opening losses weighed by the Bloomberg story,

better than expected German factory orders and bond supply from France and

Spain. German 10-yr yield is +3bp 0.334%, curve pivoting around 5-yr sector.

- EMU periphery are holding up relatively well with the exception of the

short-end of the BTP curve which has seen some heavy selling. 1-yr Bund/BTP is

+1bp

- US 10-yr yield is 2.6bp higher at 2.857% with curve ever so slightly bear

flattening with 5s/30s 0.8bp tighter at 22.8bps as cash markets return from

independence day holiday with key events over next 2-days seen directing mkts.

- Gilts also trading lower led by the 2-yr to 10-yr part of the curve, as chance

of next BoE rate hike coming in Aug increases, while long-end remains anchored.

10-yr Gilt yield is +1.8bp at 1.295% with 2s/30s 0.9bp tighter.

- Money market futures are lower across the board with Euribors underperforming