Core EGBs have begun the week up........>

EGB SUMMARY: Core EGBs have begun the week up slightly, with Italian BTPs

plumbing new lows, following through from weakness Friday.

- The Dec 18 Bund future is up 6 ticks at 157.67, recovering a bit of last

week's heavy losses. 2-Yr yield down 0.7bps at -0.521%, 5-Yr down 1.1bps at

-0.033%, 10-Yr down 1.5bps at 0.558%, and 30-Yr down 0.8bps at 1.174%.

- 10-Year BTPs gapped higher to highest levels since February 2014, up 8.2bps at

3.506%. Still, the curve has bear flattened, 2-Yr yield up 14.6bps at 1.498%.

- Deputy PM Di Maio stirred the pot over the weekend, saying that the government

is pressing ahead with its expansive budgetary plans, with 'no plan B'. Deputy

PM Salvini followed up with comments on radio Monday morning saying that 'no day

passes without Europe attacking Italy'.

- Periphery EGB spreads a little wider, but far from the Italy move to Bunds

(10-Yr out 9.7bps). Italy out 7.1bps vs Spain at 191.8bps.

- Euribor futures are mixed, White contracts down 0.5 ticks. 

- Quiet day for data (also a U.S./Japan holiday), German Industrial Production

data for Aug out earlier showed -0.3% M/M (vs 0.3% surv), but Y/Y in line.