Core EGBs have been largely steady......>

EGB SUMMARY: Core EGBs have been largely steady through early Wednesday, with a

heavy supply schedule out of the way, and the ECB decision lying in wait.

- Jun Bund futures (RX) are down 6 ticks at 165.42 (L: 165.41 / H: 165.63), with

German cash yields trading slightly higher (+0.5-1.0bps).

- Periphery EGBs are faring well, with BTP Jun futures up 28 ticks at 130.44,

with the Italian belly outperforming (5-Yr down 3.3bps at 1.456%).

- Spreads lower across the space: 10-Yr Italy vs Bunds down 3.4bps, Spain in

2.2bps, Greece down 2.9bps, and Portugal down 2.5bps.

- Portugal continues to bask in DBRS`s outlook upgrade to positive last week

from stable (BBB), plus potential early repayment of EFSF loans.

- Good week to go to auction then, this morning selling E1bln of Jun-29 and

Apr-37 PGBs amid solid cover.

- German Bobl and Finnish RFGB (E1bln) sales went smoothly also, with semi-core

Finland's spreads tightening to Bunds. Italy and Spain supply coming Thursday.

- ECB decision up in just under an hour.

- Euribor futures up slightly, biggest gains in Blues (+1.5 ticks).