- US TSYs have rallied this morning....>

BOND SUMMARY: - US TSYs have rallied this morning with the 2-year yield pushing

down to 2.863% from 2.895% while the 10-year yield is down to 3.1299% from

3.1695%.

- The longer end of the JGB curve has made decent gains with the 10-year yield

down to 0.121% from a high of 0.140%.

- Bunds have rallied across the curve, with marginal flattening. The 2-year

benchmark bund yield has traded down to -0.630% from a morning high of -0.612%.

- The risk-off bid has extended to French OATS, with slight outperformance at

the longer end causing the curve to steepen.

- Italian BTPs have been somewhat contained relative to recent trading, despite

the standoff between Rome and Brussels over the budget. The 2-year has traded

within a 1.111/1.180% range.

- The gilt curve has narrowed on the back of the long end rally. The 2s10s

spread has edged down to 71.9bps from 74.1bps.

- Eurodollar futures are 4.0-5.0 ticks higher in the greens/blues, with Euribor

futures similarly up 2.5-3.0 ticks.