A pick-up in risk appetite appears to...>

EGB SUMMARY: A pick-up in risk appetite appears to have won out after a session

of back-and-forth trading, with periphery EGB spreads off their highs and Bund

yields off their lows.

- Bunds traded in largely directionless fashion, with yields rising at the open,

then drifting lower over the afternoon before picking up sharply after 1500BST.

The 10-yr yield is up 1.4bps at 0.3256%, having traded between 0.319%-0.334%.

- Italian spreads retreated sharply from Monday`s highs, but are wider from the

morning`s lows. 2-yr BTPs moved 11.2bps inside Bunds, though had been 15bps

inside at one point.

- Spanish spreads have underperformed, but 10-yr Bonos have moved 5.2bps inside

Germany on a 3.8bps drop in yields to 1.417%.

- OAT spreads have narrowed slightly, 10-yr 10bps tighter to Bunds.

- The Euribor futures strip is almost completely flat, with some earlier bear

steepening erased over the afternoon.

- After a busy day of data, Wednesday looks quiet, with just a long-end German

bond auction on tap - though Turkey and Italy remain able to move the needle.