US 10Y Tsy yields are off their........>

BOND SUMMARY: US 10Y Tsy yields are off their highs but have clearly broken

through the 3.06% level that we identified in our POV on May 15, with today's

high of 3.1205% coming very close to the next key upside level at 3.125%.

- Italian BTPs remain under pressure. Negotiations between 5-Star and Lega

continue today, with the populists` policy platform reportedly nearing

completion, though another leaked policy document draft last night continued to

suggest a decidedly eurosceptic and fiscally loose direction. 10Y BTP/Bund

spread at 148.5bps, down 2.6bps but still around yesterday's high of 151.1bps.

- Bunds opened the day with a sharp sell-off but have since clawed back some

losses. Jun18 future off 23 ticks at 157.95, though that is 21 ticks above

today's low. Curve steepening slightly, 2s10s up 1.6bps to 119.2bps.

- Gilts have moved lower alongside USTs and news that the UK is prepared to stay

in the EU customs union beyond 2021. Jun18 future off 40 ticks to 121.15. The

short sterling strip is steeper, with blues off 4-5 ticks to three-week lows.

- JGBs outperforming most other markets, with Jun18 future off just 3 ticks to

150.66.