- The US and Japan observe national....>

BOND SUMMARY: - The US and Japan observe national holidays today.

- German bunds have rallied this morning and the curve has flattened on the back

of the longer end outperforming. The benchmark 2-year bund trades at a yield of

-0.551% down from a morning high of -0.5286% and the 10-year yield has edged

down to 0.533% from 0.572%. The 2s10s spread has narrowed to 106.96bps from

109.1bps.

- French OAT yields have similarly pushed lower since the open, although there

has been only marginal flattening of the curve. The 10-year OAT trades at a

yield of 0.878% down from 0.908%.

- There has been a sharp sell off in Italian BTPs this morning with the short

end underperforming. The 2-year BTP yield surged to a morning high of 1.6197%

from a low of 1.331% and has since pulled back to 1.543%. Sharp rhetoric from

Deputy Prime Minister Matteo Salvini aimed at Brussels has refuelled the rolling

political drama.

- The Euribor futures strip has flattened with whites down 0.5 ticks and

greens/blues up 1.5-2.5 ticks.