Core EGB yields have fallen to open.....>

EGB SUMMARY: Core EGB yields have fallen to open Wednesday, with Italy

backtracking from recent gains, supply this morning and ECB meeting on Thursday.

- Bund Dec18 futures are up 20 ticks at 159.49, with the curve bull flattening

(2-Yr yield down 0.3bps at -0.540%, 10s down 0.4bps at 0.426%). 

- The exception on the German curve is the 30-Yr, whose yield is down just

0.2bps at 1.1050% ahead of today's E1bln re-open of 1.25% Aug-48 Buxl.

- Italian yields continue to reverse following Tuesday's low. Deputy PM Di Maio

quoted by Ansa saying that the government could face a 'serious problem' if it

does not introduce a citizens' income in the next budget.

- 2-Yr BTP yield now up to 0.831% from a low of 0.665% Tuesday. 

- Portugal also comes to market today, selling E0.75-1.0bln of 5- and 10-Yr

PGBs. 10-Yr yields up 0.4bps at 0.974%, spread over GErmany up 0.9bps at

147.2bps.

-Euribor futures have edged a little higher, up 0.5-1.0 ticks across the strip.

- Data this morning highlighted by Eurozone Q2 unemployment & Jul industrial

production at 0900GMT.