Core EGBs continue are seeking..........>

EGB SUMMARY: Core EGBs continue are seeking short-term direction, with Italian

and Greek spreads slightly wider Tuesday morning.

- The Dec 18 Bund future is down 10 ticks at 160.19, middle of today's range of

160.03-160.39.

- Still awaiting Italian response to Brussels on budget. In a statement this

morning, Fin Min Tria said the Treasury would not revise its growth targets.

- Ansa reporting that Rome may tell the EU it will raise its target for

privatisations, however.

- Like Bunds, BTPs in the middle of daily range: Dec 18 future down 26 ticks at

121.35, (L 120.99-H 121.72 today). 10Y/Bund spread up 4.2bps at 308.2bps.

- Greece also out 3.9bps; Spain and Portugal out 1bps each.

- GGBs weakened as BBG sources reported Greek cenbank would use special purpose

vehicles to buy E42bln bad debt from banks.

- Euribor pretty flat across the strip; ECB`s Praet typically dovish this

morning. De Guindos speaks at 1900GMT.