A back-and-forth session for EGBs.......>

EGB SUMMARY: A back-and-forth session for EGBs appears to be settling in a

risk-off direction, with Bunds rallying and periphery spreads widening.

- Bund yields started the day on the wrong foot but have settled as risk

aversion has picked up alongside equities turning lower. 10-Yr Bund yield down

1.2bps at 0.315%, having hit a high of 0.336%.

- The German curve is a little steeper as 2-yrs are unchanged, with 10-Yrs

outperforming Bobls and Buxls.

- Periphery spreads are slightly wider, with the exception of 2-yr Italian BTPs,

which at 183.8bps over bunds have come in 4.1bps.

- 10-Yr BTP/Bund spread is 2.2bps wider, lagging the rest of the periphery, as

the Italian curve has steepened sharply. 10-yr yields are 1.2bps higher at

3.043%, versus 2-yrs rallying 4.0bps at 1.202%.

- Euribor futures are picking up modestly, with Green and Blue contracts

outperforming in a modest bull flattening move, up 0.5-1.0 ticks.

- Focus will be on US data for the rest of the day, with data releases that

include retail sales and industrial production.