Volatility in Turkey and other.........>

BOND SUMMARY: Volatility in Turkey and other emerging markets has boosted

safe-haven bonds, with European periphery spreads selling off led by Italy.

- Concern over the ongoing budget process is helping send Italian BTPs lower,

with the curve out 5-6bps out to 10-Yrs. With Bunds roughly flat on the day,

spreads vs Germany are around 5-6bps wider.

- Earlier, 10-Yr BTP spreads hit the highest since early June at 277bps.

- US Treasury yields have risen from their lows but the belly of the curve

continues to outperform, with the 5-Yr yield down 1.4bps at 2.731%, 2s and 10s

down by 0.9bps.

- 10-Yr JGB yields are flat, but the rest of the curve has rallied 0.4-0.7bps.

- UK Gilts are a touch higher, with the Sep8 future up 4 ticks at 123.60.

- Rate future strips are a little flatter, with White Short Sterling and Euribor

contracts 0.5-1.0 ticks lower and Greens/Blues up 0.5-1.0 ticks.

- Thin data/speaker calendar the rest of Monday, with attention likely to remain

on developments in Turkey.