Core EGBs are weaker as they face.......>

EGB SUMMARY: Core EGBs are weaker as they face conflicting forces early Tuesday,

with equities up but German data decidedly poor.

- The Mar 19 Bund future is down 35 ticks at 163.61, with the cash curve bear

steepening slightly: 2-Yr yield is up 1bps at -0.574%, 5-Yr is up 1.3bps at

-0.314%, 10-Yr is up 1.6bps at 0.237%, and 30-Yr is up 1.3bps at 0.879%.

- EuroStoxx is up 0.6% to highest levels since mid-December, but possibly

offsetting is very poor German IP data (-1.9% M/M, -4.7% Y/Y; vs Oct -0.8% M/M).

- Indeed, Bunds caught a bid after that data, but have sold off since.

- The Mar 19 BTP future is down 5 ticks at 126.22, with 2-Yr yields up 0.9bps at

0.518% and 10-Yr up 0.5bps at 2.904%. Reported Monday night that the Italian

govt would offer guarantees on Carige Bank bonds.

- French 10-Yr OAT spreads v Bunds still around 50bps, highest since May 2017.

- Periphery EGBs trading mixed; 10-Yr Spain 0.4bps wider to Bunds, Portugal

0.7bps narrower, and Greek spreads in 2.6bps.

- Lots of supply today, with Austria, Netherlands and Germany coming to market.

- Main data later is Eurozone flash Dec confidence indicators at 1000GMT.