With few signs of a near-term..........>

BOND SUMMARY: With few signs of a near-term resolution to the latest US-China

trade dispute escalation, and with no fixed data for a resumption of

negotiations, markets are growing increasingly nervous. Equities have lurched

lower, US TSYs have rallied and several Asian currencies have traded weaker -

particularly KRW.

- US TSY yields are 3-5bp lower on the day. Current yield levels: 2-year 2.217%,

5-year 2.212%, 10-year 2.425%, 30-year 2.859%.

- Speculation continues to mount that the UK Conservative Party could seek to

change its own rules for electing a leader in a bid to trigger a new confidence

motion in PM Theresa May. Polling suggests both that Nigel Farage's Brexit Party

could top the upcoming EP poll and that the Tories could suffer a humiliating

defeat. The Jun-19 gilt future trades at 127.98, 12 ticks off the low.

- Core ERBs trade close to unch on the day. 

- Italian BTPs have sold off and the curve has flattened slightly with 2s30s

narrowing ~2bp.

- Euribor and short sterling futures are broadly flat/0.5 ticks higher.