US Tsys have inched higher..........>

US TSYS SUMMARY: US Tsys have inched higher supported by mild risk-off flows

following exchange of missiles between Syria/Iran and Israel and following

increased possibility of a populist government in Italy. Yields are around 1.5bp

lower across the board in decent volume with 10-yr currently at 2.975%.

- Tsys edged higher during Asia Iranian-Israeli tensions simmered, with reports

of missiles being fired between Israel & Iranian assets in Syria supporting the

space, which allowed the curve to flatten slightly.

- Tsys initially pared gains at start European session, but rallied to fresh

session highs on back of widening Bund/BTP spreads as former PM Berlusconi gave

consent for League and M5S to hold formation talks.

- Eurodollars modestly higher, with curve flatter as blue contracts rise by

2.5-3 ticks albeit in low volume.

- Focus on Thursday will fall on US CPI data & 30-Year Tsy supply, with

participants also keeping an eye on the BoE MonPol decision & QIR, as well as

the press conference headed by BoE Gov. Carney.