We saw another very strong European....>

BOND SUMMARY: We saw another very strong European open, with core bonds adding

to gains seen overnight. US 10-year and 30-year yields have once again hit

record lows falling through 1.20% and 1.70% for the first time. Bund yields have

fallen through -0.60% while 10y gilt yields are below -0.40%. Volumes continue

to remain high. Bonds are currently a little off their highs of the day.

- BTP-Bund spreads hit their widest levels since August with spreads widening to

as much as 182.8bp in early European trading. However, spreads have since come

back in and at time of writing are at 175bp.

- Data has once again been largely ignored by the market with CPI a bit lower

than expected in Italy, in line with expectations in France and regional prints

in Germany pointing to an upside surprise. Looking ahead US personal

income/spending and trade are all due. The MNI Chicago Business Barometer will

be closely watched to see how sentiment has developed, particularly after the

big fall in the US preliminary reading of the US Markit PMI.

- TY1 futures are up 0-29 today at 134-07+ with Bund futures up 0.71 at 177.29

and Gilt futures up 0.36 at 135.47.