Core EGBs are flat but off day's........>

EGB SUMMARY: Core EGBs are flat but off day's lows, and periphery EGBs are

rallying, as a nascent budget conflict between Italy and Brussels simmers.

- Dec 18 Bund future is down 1 tick at 158.58, low of 158.34 today. 2-Yr yield

up 0.4bps at -0.562%, 5-Yr is unchanged at -0.097%, 10-Yr down 0.3bps at 0.5%,

and 30-Yr down 0.4bps at 1.126%.

- Meanwhile, the Dec 18 BTP future is up 100 ticks at 121, having seen a high of

121.28. Market taking Italy budget news in stride; latest is EU's Juncker saying

the eurozone would 'revolt' if Brussels approves Italy's budget.

- Italy not even the best performer today - that distinction goes to Greece,

whose 10-Yr yield is 10.6bps narrower to Bunds at 378.1bps (BTPs 9bps narrower

at 295.3bps).

- Euribor futures trading a bit higher, 0.5-1.0 ticks up across the strip.