There is a mild risk-on sentiment at start.....>

EGBS: There is a mild risk-on sentiment at start of European bond trading Monday

with German 10-yr Bund yield rising 0.9bp to 0.301%, while Italy 10-yr yield is

0.5bp lower at 2.709%.

- US Tsys slipped lower in Asia with broader markets seemingly breathing a sigh

of relief after the U.S.-China trade spat failed to escalate further over the

weekend. While it was a relatively quiet weekend for European politics and

German exports jumped higher in May.

- The main event today will be comments from ECB president Mario Draghi at the

European parliament in Brussels, although comments on monetary policy might be

limited as he is speaking in his capacity as ESRB Chair.

- BTPs have opened modestly higher with the short-end once gain leading the way,

so continuing to steepen the curve. 2s/10s spread was near 200bps last week, but

now trades at 188.7bps. Market will be keeping an eye on finance ministry

announcement of medium/long BTP supply tonight

- Sovereign bond issuance picks up this week and with no offsetting coupon or

redemption payments, EGBs could be under pressure this week.