A relatively muted start to Wednesday trade,...>

EGBS: A relatively muted start to Wednesday trade, however BTPs continue to

extend gains as markets take positives from latest Salvini comments on the

budget earlier this morning. Italy 10-yr yield is 7bp lower at 2.947% while the

BTP curve is bull steepening as short-end yields fall circa 13bps.

- Reports earlier this morning quoted Salvini saying that the budget deficit is

seen around 2% with the proposed flat tax postponed for now but the reduction in

the pension age being a top priority.

- Meanwhile German bonds have opened little changed with 10-yr yield is 0.3bp

higher at 0.36% as market wait for next directional move.

- Main data highlights today are Eurozone final service and composite PMI

numbers at 0900BST, followed by Eurozone retail sales at 1000BST. There are also

comments from ECB executive board member Praet who speaks in Vienna at 0930BST.

- Euribor strip is marginally steeper as white and red contracts are steady to

0.5 tick higher, while blues are steady to 0.5 tick lower.