Bunds overcame sharp early losses to....>

EGB SUMMARY: Bunds overcame sharp early losses to post gains as of late Thursday

afternoon, with the G20 meeting looming over the coming 48 hours.

- Accelerating state inflation data for June helped sink Bunds early. But with

this acceleration having been priced in, Sep futures were boosted after national

level data came out at 1300UK.

- Sep Bund futures (RX) up 13 ticks at 172.63 (L: 171.92 / H: 172.65).

- German belly outperforming: 2-Yr yield down 0.9bps at -0.739%, 5-Yr down

1.7bps at -0.648%, 10-Yr down 1.3bps at -0.316%, 30-Yr down 1bps at 0.262%.

- Bunds tracking Tsys closely; G20 headline noise likely to remain impactful.

- Euribor futures up 1.0-1.5 ticks across most of the strip.

- Italy-EU talks on EDP at G20 will be one of the focus points; BTP spreads

largely unchanged Thursday, though that makes Italy a periphery outperformer:

Spain, Portugal, Greece 10-Yrs are 2-3bps wider of Bunds.

- Sep OAT futures (OA) up 10 ticks at 164.73 (L: 164.08 / H: 164.78)

- Friday`s highlight, G20 aside, is France/Italy/Eurozone prelim Jun inflation.