The underlying theme so far today is...>

BOND SUMMARY: The underlying theme so far today is risk-on, with Eurozone

economic data (GDP, PMIs) largely in line with modest expectations and political

developments helping the EMU periphery. 

-Specifically, pushback from Italy President Mattarella on fresh elections has

helped 10-year BTP/Bund spreads fall to 117.5bps, down more than 5bps from

Monday's pre-holiday close. German 10-yr Bund yield is 2.3bp higher at 0.582%.

- Better than expected UK construction data for April accelerated losses for

June gilt futures, trading 44 ticks lower at 122.01. 

- US 10y Tsy yields are up 2.4bps and look like they are again going to test the

3.00% level, now at 2.9906%. Focus is on today's FOMC MonPol decision, with the

Fed expected to stand pat. Participants are looking to the June meeting, with

markets fully pricing in a hike at next month's decision. US ADP data also hits

today. The US Tsy will also announce its quarterly refunding details.

- JGBs slipped as Tsys moved lower and the latest liquidity enhancement auction

for JGBs with 1-5 Years until maturity experienced a softer bid-to-cover ratio

than the prior. Jun8 JGB futures last trade 5 ticks worse off at 150.83.