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With China's Commerce Ministry.........>

BOND SUMMARY
BOND SUMMARY: With China's Commerce Ministry stating that there are no plans for
US officials to come to Beijing for further trade talks, risk sentiment
continues to sour. USTs are bid with yields ~2-3bp lower from the morning highs.
TYM9 trades at 124-20+ near best levels.
- Cross party talks between the UK's Conservatives and Labour are close to
breaking down, with opposition leader Jeremy Corbyn appearing to move towards a
confirmatory referendum pledge. Gilts have firmed this morning with yields 1-2bp
lower.
- Campaigning ahead of the European Parliamentary elections could be straining
the Italian coalition. The League's Matteo Salvini has told Italians he could be
their own Donald Trump, while Five Star's Luigi Di Maio has warned that a clash
with his coalition partner is 'certain' if it backs ultra-right policies. This
has done little to dampen demand for BTPs, with the short-end outperforming the
curve.
- Bunds have rallied slightly. Current yield levels: 2-year -0.657%, 5-year
-0.520%, 10-year -0.1098%, 30-year 0.529%.

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