Core EGBs are rallying open the week,...>

EGB SUMMARY: Core EGBs are rallying open the week, with the Italian budget

remaining the centre of attention, and Brexit lurking not far behind. 

- Bund futures hit a November high this morning with the Dec18 contract reaching

at 160.30, last up 24 ticks at 160.27. 

- The belly is outperforming on the German curve: 2-Yr yield is down 1.4bps at

-0.612%, 5-Yr is down 1.9bps at -0.197%, 10-Yr is down 1.8bps at 0.389%, and

30-Yr is down 1.1bps at 1.033%.

- BTPs are relatively flat after the Dec 18 future rose 54 ticks after the open,

last down 7 ticks at 121.98. 10-Yr spread out 2.0bps vs Bunds at 301.6bps.

- Tuesday is the deadline for Italy to respond to the EC's letter on the budget,

but no signs whatsoever that Rome will budge. Deputy PM Salvini said Sunday that

his government could block EU budget decisions, in protest at migration policy.

- ECB's de Guindos speaks at 0900GMT.

- Lots of data this week (GDP, Infl), but little Monday.

- Flow has been fairly light; U.S. Veteran Day holiday may affect liquidity.