There has been some divergence in......>

BOND SUMMARY: There has been some divergence in global fixed income this morning

with gilts higher while USTs and Bunds are lower on the day.

- The big story of the morning has been the reaction to BoE MPC member Jan

Vlieghe's comments in the FT yesterday that he would be closely watching

upcoming UK data and would join 2 other external MPC members voting for a cut if

data did not improve soon. This follows a dovish speech from BoE Governor Carney

last week as well as comments from the final external MPC member Tenreyro that

she could vote for a cut in the "coming months". Gilt futures opened higher and

have also been helped by some disappointing monthly GDP data today which showed

a slowdown in both services and manufacturing (although manufacturing data was

impacted by auto shutdowns).

- Elsewhere, risk on sentiment has dominated with Bund and UST futures lower

while peripheral spreads are little changed on the day with the exception of BTP

spreads which are a little wider, reversing some of the tightening seen Friday.

- TY1 futures are down -0-3+ today at 128-31 with Bund futures down -0.27 at

171.08 and Gilt futures up 0.32 at 132.09.