Bear steepening has been Monday's.......>

EGB SUMMARY: Bear steepening has been Monday's dominant theme in EGBs, with

10-year bonds faring the worst as markets eye a potential hawkish policy shift

from the Bank of Japan overnight as well as upcoming supply.

- 10-Yr Bund yields rose by 4.8bps to 0.452%, with the curve steeper: 2-Yrs and

5-Yrs were up by 1.8bps and 4.0bps respectively. E3bln 10-Yr auction on Weds.

- Spreads versus Bunds were mixed across EGBs. OAT 10-Years were out 0.5bps at

30.0bps, and Spain 10s also widened by 0.4bps. Supply potentially weighing, with

France and Spain coming to market for M/L-T issues on Thursday.

- But elsewhere, spreads compressed: Italian 10-Yr BTPs came in 0.6bps to

233.5bps, off a high earlier in the day of 238.7bps, while Portuguese PGB

spreads compressed by a similar magnitude.

- Longer-dated Euribor futures fell, with Green contracts down 2-3 ticks and

Blues off 3.5-4.5 ticks.

- Apart from BOJ decision overnight and Fed and ECB later in the week, attention

on EMU flash inflation and unemployment data Tuesday.