VIEW: Goldman Sachs note that "tactically,....>

BUNDS: VIEW: Goldman Sachs note that "tactically, we expect core yields to rise

in Europe. Data continues to strengthen, risk assets are trading relatively

well, and inflation globally is repricing higher. In addition, recent comments

from ECB Governing Council members that the PEPP envelope is a "ceiling" rather

than a commitment suggests an incrementally higher hurdle to any upsizing of

balance sheet expansion. We do not think there are any clear near-term

implications to these comments, but at the margin they should nudge lower

overall expectations for the size of the future asset purchases. Since the lows

in 10y bund yields at end-April, yields have lagged the repricing in growth and

inflation factors by around 15bp, a gap explained by the policy factor. The

latest shift in communication raises the hurdle for further policy surprises,

skewing the risks to higher yields "