The release of the incoming Italian....>

BOND SUMMARY: The release of the incoming Italian populist coalition

government's programme at 0910BST sparked a risk-off move in EGBs.

- The final 5-Star/Lega plan's omission/watering down of the most

market-unfriendly policies (write-off of ECB-held debt, accounting tricks to

reduce debt-to-GDP, eurozone exit procedure) helped Italian bonds recover early

losses, but they have since dropped to session lows as news has been digested.

- 10Y BTP yields have widened 7bps to 2.185%, with 2.20% the key next level to

watch. The spread over Bunds has widened 8bps to 155.6bps, with Thursday`s high

of 158.4bps in sight. Bunds have edged up, Jun18 futures +10 ticks to 157.97.

Bund future block steepener seen earlier, +15k OEM8 @130.83 vs -3k UBM8 @161.16.

- Gilts have fared better, with 10s yields down 2.4bps to last trade at the

day`s low at 1.538%. 

- After hitting 2011 highs at 3.1261% in Asian trading, 10Y UST yields retreated

to 3.1021%. 2s10s giving up some recent steepening, off 0.2bps to 54.1bps.

- 10-year JGB future has recovered from an earlier sharp fall, up from the low

of 150.63 to last trade 150.72.