- US TSY yields inch higher with the...>

BOND SUMMARY: - US TSY yields inch higher with the 10-year benchmark trading at

3.065% up from 3.048%.

- JGBs trade in a tight range. Key yield levels 2-year -0.127%, 10-year 0.128%,

30-year 0.907%

- German bunds have rallied over the past hour with the longer end

outperforming. The 10-year benchmark trades at a yield of 0.435% down from a

morning high of 0.460%. The final Services and Composite PMI data for September

came in slightly weaker than expected.

- French OATs have rallied and the curve has flattened slightly. The 2s10s

spread has narrowed to 115.8bps from a session high of 116.4bps.

- Markets remain concerned by Italy's budget proposal, despite indications that

a narrower deficit will be pursued after 2019. The benchmark 2-year BTP yield

has surged to 1.363% from a low of 1.143% and the 10-year trades at 3.402% from

3.272%.

- The early morning rally in gilts has lost momentum.

- Euro$ are 0.5-2.5 ticks lower. The Euribor futures strip has steepened.