- The early morning rally in US TSYs...>

BOND SUMMARY: - The early morning rally in US TSYs has reversed and the curve is

broadly flat on the day.

- Long-end JGB yields have ticked lower with the 10-year trading at 0.106% down

from 0.114%.

- German bunds have sold off this morning alongside a slight steepening of the

curve on the back of an upside CPI surprise for September (0.4% M/M vs 0.1%

survey). The 2-year benchmark bund trades at -0.516% up from -0.557% and the

10-year at 0.508% up from 0.476%.

- French yields have similarly pushed higher with the 10-year trading at 0.829%

from a low of 0.802%.

- The sell-off in short end Italian BTPs has reversed. Having hit a high of

0.947%, the 2-year BTP yield subsequently tumbled to 0.794%.

- Gilts have weakened with underperformance at the short end causing the curve

to flatten. The 2s10s spread has narrowed to 76.1bps from 79.5bps.

- Euro$ futures are 1.0-2.5 ticks higher. The Euribor futures strip has

flattened with whites down 0.5 ticks and greens/blues up 1.0-2.0 ticks.