The tone this morning is distinctly....>

BOND SUMMARY: The tone this morning is distinctly risk-off as the increasingly

erratic trade war and hardening positions of the US and China are rapidly

eroding risk sentiment. Brent crude oil now trades at USD61.31/bbl and down

USD10 over the last fortnight, equities have weakened and core FI is broadly

bid.

- USTs have seen relatively strong price action this morning. Yields are 3-5bp

lower with the short-end leading the charge.

- Bunds trade relatively mixed, with the curve flattening on the back of the

longer-end rally. 2s30s has narrowed ~3bp on the day. 

- Italian BTPs have rallied strongly with yields at the short-end/belly down

7-8bp.  

- The contractionary manufacturing PMI release for the UK confirms both that

Brexit-related stockpiling in April is rolling out, and that industry is now

likely to suffer at the hands of intensifying global trade headwinds. Current

gilt yield levels: 2-year 0.573%, 5-year 0.612%, 10-year 0.863%, 30-year 1.453%.

- Euro$ futures have rallied with whites outperforming.