A sharp correction in US Treasuries.....>

EGB SUMMARY: A sharp correction in US Treasuries following the above-consensus

US nonfarm payroll data for August pushed EGBs lower to end the week. 

- The German curve steepened sharply, with 10-Yr Bund yields up 3.6bps at

-0.555%, and 2-Yrs up 1.8bps at -0.555%.

- This helped bring periphery spreads lower, with Greece leading the charge, its

10-Yr spread over German Bunds dropping 14.7bps at 391.2bps.

- Italian BTPs have had a poor end to an otherwise superb week, with 10-Yr

yields down 0.8bps to 3.050% after having fallen earlier as far as 2.974%. For

the week, the 10-Yr yield is down nearly 19bps.

- The 2-Yr BTP has fallen by over 50bps to 0.913% this week on conciliatory

budget rhetoric from the government, but is off the weekly low of 0.830%.

- Euribor futures were little changed despite big (8+ tick) moves in

Eurodollars. ER Dec21-Jun22 last up 1-2 ticks.

- A slightly more subdued week of data lies ahead compared with this week's

heavy slate; highlights include German ZEW Tuesday and Eurozone job and

industrial production data on Wednesday.