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

BOND SUMMARY: US TSYs have rallied this morning with still no sign of a thaw in

Washington-Beijing relations. TYM9 trades at 124-18, near the highs of the day.

- Italian budget politics have come back to the fore and roiled BTPs. Deputy

Prime Minister Matteo Salvini has stated that it is his 'duty' to break EU

budget rules and that the rules are 'outdated'. Although likely a bid to shore

up support ahead of European Parliamentary elections, Salvini's comments will

nonetheless restoke concerns in Brussels. The 2yr BTP yield is 7bp higher on the

day and at one point in the morning was +12bp.

- UK PM Theresa May appears to be pushing Labour leader Jeremy Corbyn to make up

his mind on her proposals to secure a cross-party Brexit deal. It is also

reported that May will seek to present her deal to parliament again next month.

Gilts have rallied this morning with yields 3-4bp lower and the curve ~2bp

flatter.

- Bunds have similarly rallied; current yield levels: 2-year 0.692%, 5-year

0.803%, 10-year 1.064%, 30-year 1.610%.

- The Euro$ futures strip has flattened with greens/blues up 3.5-4.0 ticks.