- The risk-off tone has underpinned....>

BOND SUMMARY: - The risk-off tone has underpinned the rally in US TSYs this

morning with the 2-year yield pushing down to 2.875% from 2.908% and the 10-year

down to 3.145% from 3.192%. 

- The rally in longer end JGBs has partially reversed with the 10-year yield

edging up to 0.146% from a low of 0.141%.

- German bunds have lacked direction and the curve is little changed from the

open. Key levels: 2-year -0.606%, 10-year 0.427%, 30-year 1.043%, 2s10s

102.5bps.

- French OATs have rallied with yields down 1-2bps across the curve.

- Italian BTPs continue to trade in a wide range. The 2-year yield surged to

1.264% from 1.148% and has since pulled back to 1.045%. The EU is expected to

provide an official comment on Italy's budget today.

- UK gilts have sold off with underperformance at the short end causing the

curve to flatten slightly.

- Euro$ futures are up 4-6.5 ticks across the strip. Euribor futures are up

0.5-2.0 ticks.