Bunds are trading weaker while Italy....>

EGB SUMMARY: Bunds are trading weaker while Italy is rallying once again, with

long-end supply in focus this morning.

- Dec18 Bund future is off 24 ticks at 159.45, with the curve slightly steeper

(2-Yr yield up -0.538%, 10-Yr up 1.6bps at 0.417%). German Finance Minister Olaf

Scholz  is set to introduce the 2019 Federal Budget this morning.

- Italian yields continue to fall: 2-Yr BTP yields have dropped a further 5.4bps

to 0.683%. The curve has bull steepened, 10-Yr yield down 3.6bps at 2.875%.

- French OATs slightly weaker in a bear steepening move; 2-Yr yields up 0.4bps

at -0.3864%, while 10-Yr yields are up 1.3bps at 0.724%.

- Euribor rate futures are off slightly, with Jun20-Jun22 off 1.0-1.5 ticks.

- Long-end EGB supply coming this morning: The Dutch State Treasury Agency

(DSTA) re-opens the 4.0% Jan-37 DSL Tuesday for between E0.75-1.25bln (results

around 0820GMT), while Spain is likely to open its order books for new

syndicated 15-year benchmark linker maturing on 30 Nov 2033 for E3.5-4.5bln.

- German ZEW survey for Sep out at 0900GMT, while ECB's Nouy participates in a

hearing at the European Parliament at 1200GMT.