BTPs are soaring as Rome appears to.....>

EGB SUMMARY: BTPs are soaring as Rome appears to be striking a more conciliatory

tone ahead of the EC's decision on the Italian budget.

- A La Stampa report that Deputy PM Salvini may be open to budget revisions

boosted the Dec 18 BTP future, now up 91 ticks at 121.22, with the curve bull

steepening (2-Yr yield down 13.7bps at 1.228%, 10-Yr down 10.9bps at 3.508%).

- EC decision on the budget set to be released from 1100GMT.

- 10-Yr BTP spreads vs Bunds have fallen 13.1bps to 313.6bps as Bund yields have

risen modestly. 2-Yr German yield is up 0.9bps at -0.583%, 5-Yr is up 1.8bps at

-0.218%, 10-Yr is up 2bps at 0.37%, and 30-Yr is up 1.4bps at 1.028%.

- EGB periphery is risk-on: 10-Yr Spain is in 3.1bps vs bunds at 126.6bps,

Portugal is down 3.8bps at 159.6bps, and Greece is down 5.2bps at 428.7bps.

- French OATs are a little weaker, Dec18 future down 17 ticks at 151.89.

- Issuance today includes Germany selling Oct-23 Bobl for E3bln, and it is the

last day for the so-far disappointing retail sale of BTP Italia.