Core and periphery EGBs alike have......>

EGB SUMMARY: Core and periphery EGBs alike have seen renewed weakness early

Tuesday following a quiet Monday session, with the Italian budget again the

focus of attention.

- Dec 18 Bund futures are down 16 ticks at 157.79, with 2-Yr yield up 1.1bps at

-0.533% and 10-Yr is up 2.7bps at 0.556%.

- BTPs are slightly higher after Monday`s rout, but are far from recovering

those losses: Dec 18 future up 8 ticks at 119.85, off intraday low of 119.46.

The 2-Yr yield is down 4.5bps at 1.512%, with 10s down 1.7bps at 3.551%.

- Italy's FM Tria and other government reps set to speak to the Parliament at

0800GMT to defend the budget, which Il Sole 24 Ore says is likely to be rejected

by the Italian budget watchdog.

- 10-Yr spread vs Bunds down 4.5bps at just under 300bps, outperforming the rest

of the periphery (which wasn`t as badly hit Monday) which is seeing a slight

rise in yields Tuesday - Spain spread/Bunds down 2.3bps at 103.9bps.

- Quiet day data-wise. Some supply this morning, with the Netherlands selling

30-Yr DSL and Germany selling Apr-26 linkers, and ESM syndicating new Jan-22.