Core EGBs and rate futures are..........>

EGB SUMMARY: Core EGBs and rate futures are slightly weaker but have recovered

from the day`s lows following data on the weak side, with periphery spreads a

little tighter despite supply upcoming this week.

- Bund Sep8 futures are off 20 ticks at 162.41 but have recovered from the low

of 162.26 after weak German ZEW figures. Euribor futures are flat, with a

1.0-1.5 tick move lower across Green and Blue contracts.

- As MNI has noted, supply is a major theme this week, with this morning seeing

auctions in the Netherlands and Germany, and books open for a EFSF dual tranche

of Feb-28/new 2053 this morning.

- Germany goes back to markets Wednesday alongside Portugal, with Italy and

Ireland up Thursday. No redemptions or major coupons this week so cash flow

implying negative impact overall.

- The long-end is under the most pressure amid supply dynamics. The Bund 2s10s

curve is 0.8bps steeper at 95.1bps today, albeit down from the high of 96.0bps.

- That said, Italian and Portuguese 10-year spreads over Bunds are a little

tighter, BTPs in 1.0bps at 235.7bps and PGBs 2.8bps at 145.36bps.