VIEW: Wednesday saw Bank of America...........>

BONDS: VIEW: Wednesday saw Bank of America Research note question "will the

demand impact of the crisis dominate in a disinflationary way or will the

supply-side damage be inflationary over the medium term? Our economists stress

the former and that seems to be what the market is pricing. Respondents to our

Survey seem concerned about upside inflation risk, but there is scant sign of

this underpinning the inflation-linked market. The good news is that you do not

have to decide. You can just go long the inflation uncertainty because there are

some linkers with such low breakevens that they can be regarded more like

nominal bonds with cheap (or seemingly free) call options on any positive future

inflation we might be lucky enough to see. JGBis and BTPeis fit the bill, but

the outstanding example is BTP Italia, offering exceptional value, in our view.