BTPs have traded in a wide range on a...>

EGB SUMMARY: BTPs have traded in a wide range on a day in which the European

Commission rejected the Italian budget (as expected).

- Dec 18 BTP future is up 104 ticks at 121.35, having traded in a range of

120.52-121.79. The 2-Yr yield is down 18.4bps at 1.181%, 5-Yr is down 17.1bps at

2.711%, 10-Yr is down 12.5bps at 3.492%, and 30-Yr is down 6.9bps at 4.057%.

- BTPs briefly spiked around 1000GMT on a mistaken headline saying Deputy PM

Salvini saying the deficit target CAN be discussed (they meant CAN'T).

- They spiked again around 1147GMT amid the EC press conference and a BBG story

citing a M5S senior lawmaker saying his party would stand firm on the budget.

- BTPs outperforming; 10Y Spain/Portugal/Greek spreads down 3-to-5bps to Bunds.

- EC in this morning's report also cited Portugal, Spain, Belgium, France, and

Slovenia at risk of breaching EU budget rules in 2019.

- The Dec 18 Bund future is down 24 ticks at 160.65, fairly narrow 160.48-160.74

trading range.

- Euribor futures are off very slightly, 0.5 ticks across the strip.