Core EGB bond markets have dipped.......>

EGB SUMMARY: Core EGB bond markets have dipped modestly during the European

morning. They have had to contend with initially strong equity market (although

some gains have faded), very strong Italian debt and fairly heavy core/semi core

supply this week.

- Currently, the 10Y Bund yield is 0.5bp higher at 0.658% with similar movements

in shorter maturity German paper but the 30Y yield has dipped 1.1bp.

- Italian debt has been quite volatile lately and Monday was no different with

the Bund-BTP spread 5.2bp tighter on the day. There was little in the way of

fresh news, just a flow that quickly caused shorts to capitulate. MNI initially

heard talk of 4-5Y cash buying and this has now shown up in an outperformance of

the sector. The 10Y has also done well, being linked to the futures contract.

- Belgium is selling 15Y Green OLO and last update saw initial price guidance

tightened 2bp and a E9.7bln book. Canada Pension Plan Investment Board

(Aaa/AAA/AAA) is also selling a 15Y  bond in Euros.

- There is no significant data today in the Eurozone although Luis de Guindos

will be at the hearing for ECB Vice President in Brussels at 1615GMT.