Core EGBs are trading weaker Friday.....>

EGB SUMMARY: Core EGBs are trading weaker Friday with periphery spreads coming

in as a result.

- 10-Yr Italian BTP spreads vs Bunds are down 3.5bps at 252.1bps, with the rest

of the periphery trading tighter as well: Spain in 2.5bps, Portugal in 4.6bps,

Greece down 5.6bps.

- Eurozone data largely in line with expectations this morning, with Italian

inflation surprising to the upside and France to the downside.

- Still, with risk-on atmosphere prevailing in the early going (EuroStoxx up

0.6%), global safe-haven instruments are weaker.

- Jun 19 Bund futures down 30 ticks at 166.09, just off day's low (166.07).

- ECB's Coeure said earlier that the eurozone's banking system was 'fully

operational' but still needed work, and that the drop in EZ inflation

expectations 'parly reflects global factors'.

- Risk tone for the rest of the day in Europe could be determined by the Brexit

vote at 1430GMT; support for P.M. May's Withdrawal deal appears on a knife's

edge though still unlikely to pass.