BTP moves have dominated the European...>

EGB SUMMARY: BTP moves have dominated the European morning session as a no

confidence vote appears to be moving closer with the expectation that an

election will be called for October.

- Yesterday Deputy PM Salvini said that the coalition had become unworkable and

today his League party has submitted a no-confidence motion in the Italian

Senate. Parliament is likely to be brought back from its summer recess with DPA

reporting that the vote will take place on August 20. Elections are likely to be

held in mid-to-late October with local press suggesting various dates including

13 and 23 Oct. 10y BTP-Bund spreads were 26bp wider at the time of writing.

- In other Italian news, Fitch is due to update its Italy rating after the

market close today. Fitch currently rate Italy as BBB with a negative outlook

(so two notches above junk).

- Bunds have moved higher today, too, in line with other core bond markets.

Other peripheral spreads are generally wider on the day.

- Bund futures are up 0.36 today at 177.29 with BTP futures down -2.37 at 137.64

and OAT futures down -0.05 at 168.53.