Bunds opened stronger but have turned...>

EGB SUMMARY: Bunds opened stronger but have turned weaker, the Dec18 future off

4 ticks at 159.13. Weakness is focused on the short-end of the cash curve, with

Schatz yields up 0.2bps and 10-Yrs largely flat.

- Italian BTPs are stronger with the 2019 budget remaining the focus. Corriere

della Sera cited sources saying that Fin Min Tria wants to keep the deficit

under 1.6% of GDP next year. PM Conte, Tria, and the two deputy PMs are set to

meet on Monday over the budget, according to Corriere.

- 2-Yr BTPs have rallied 12.0bps at 1.8794%, with 10-Yrs in 1.8bps at 1.468%.

- Supply this morning includes Belgium re-opening four OLOs for a total of

between E3.4-3.9bln: 0.20% Oct-23, 0.80% Jun-28, 1.60% Jun-47, and 2.25% Jun-57.

- Euribor futures are flat so far this morning. Reuters sources piece released

late Friday noted that some ECB policymakers wanted Draghi to strike a more

cautious tone on the economy in this week's policy message.

- EMU final August inflation figures out at 0900GMT, no changes expected (2.0%

Y/Y headline, 1.0% core). Focus later this week turns to the EU's informal

leaders' summit in Salzburg on Thursday.