A constructive start to EGB trading.....>

EGB SUMMARY: A constructive start to EGB trading early Thursday, alongside

weaker equities and a flat euro.

- Bund futures had a quiet Asian session, dropped at European open and since

bounced; last up 28 ticks at 164.87. 2-Yr yield is down 0.5bps at -0.607%, 5-Yr

down 1.5bps at -0.387%, 10-Yr down 1.8bps at 0.206%, 30-Yr down 1.7bps at 0.82%.

- EuroStoxx50 off 0.7% early, with EURUSD flat on the day at 1.1387.

- Decent start for BTPs, PM Conte said cabinet would approve the budget Thurs.

- Mar 19 BTP future is down 5 ticks at 127.69, with 2-Yr yield down 1.2bps at

0.304%, 10-Yr is up 0.4bps at 2.759% (spread vs Bunds 2.5bps wider at 255.6bps).

- Issuance today: Spain coming to market for a combined E5.0bln selling the

0.05% Oct-21, 0.35% Jul-23, 2.75% Oct-24, and 1.50% Apr-27 Bono/Oblis.

- Spain spreads steady (10-Yr out around 1bps vs Bunds at 116bps).

- In a Politico interview, ECB's Lautenschlaeger said she still expected a 2019

rate hike, and `not disheartened yet` with incoming macro developments. She is

speaking in Dublin at 1100GMT as well, the only ECB speaker scheduled Thursday.

- 1000GMT sees EMU Final Dec inflation, and Nov Construction output data.