BTPs have soared early Monday after a...>

EGB SUMMARY: BTPs have soared early Monday after a ratings reprieve, with core

EGBs a little weaker.

- Fitch Friday affirmed Italy's sovereign credit at BBB (outlook neg.). While

broadly expected, BTPs rallied, as thought to be outside chance of a downgrade.

- The Mar 19 BTP future is up 83 ticks at 128.22, having traded as high as

128.54. The 2-Yr yield is down 7.5bps at 0.439%, 10-Yr is down 7.5bps at 2.772%.

- 10-Yr BTPs vs Bund spread is down 8.5bps at 266.7bps. Other periphery EGBs

fairly steady in contrast though 0.9-1.0bps tighter.

- Risk-on atmosphere has helped soften Bunds, esp given positive US-China trade

news over the weekend. Mar 19 futures down 18 ticks at 166.44.

- 2-Yr German yield is up 0.8bps at -0.557%, 5-Yr is up 1bps at -0.339%, 10-Yr

is up 1bps at 0.106%, and 30-Yr is up 1.2bps at 0.728%.

- French 10-Yr spreads/Germany a little tighter, in 0.6bps at 41.5bps.

- Quiet on ECB speaker front. Key data is done for the day following Spain PPI.