- US TSY yields have spiked higher.....>

BOND SUMMARY: - US TSY yields have spiked higher over the past hour with the

10-year benchmark yield up to 3.083% from 3.057%.

- JGB yields have drifted lower with the 2-year yield trading down to -0.130%

from -0.120% and the 10-year edging down to 0.096% from 0.118%.

- Following news that Chancellor Angela Merkel will step down as head of the CDU

in the wake of another poor electoral result - this time in Hesse - bunds have

sold off. The 10-year trades at 0.386% up from 0.345%.

- Following a strong open for Italian BTPs on the back of S&Ps decision to keep

Italy's sovereign credit rate unchanged (but with negative outlook), sideways

trading has prevailed since 0800BST. The 2-year trades at 3.326% from 3.443% at

the Friday close.

- Gilts have sold off across the curve with the 2-year yield pushing up to

0.726% from a low of 0.696% and the 10-year up to 1.401% from 1.360%.

- Euro$ futures are broadly 0.5-2.0 ticks lower and the Euribor futures strip

has steepened with greens/blues down 2.0-3.0 ticks.