Core EGBs have continued to rally.......>

EGB SUMMARY: Core EGBs have continued to rally this morning as risk-off

sentiment has seen investors sell periphery EGBs along with equities.

- The Mar-19 Bund future is up 44 ticks at 163.29, having traded in a range of

162.94-163.35 today. The Bund cash curve has bull flattened across the morning

with the long end seeing the the best performance. 

- The 2-yr German yield is down 1.0bps at -0.614%, whilst the 10-yr is down

3.1bps at 0.246%. 

- The Mar-19 BTP future is down 54 ticks at 123.47, close to days lows of

123.41. Reports suggesting the 5-Star party would consider a 2.1% budget deficit

have given the contract little support as broader risk-off sentiment weighs.

- The BTP curve is relatively flat between the 2-yr and 10-yr, flattening by

just 0.3bps. The 2-Yr yield is up 6.3bps at 0.651%, 5-Yr is up 6.8bps at 2.139%,

and 10-Yr is up 6bps at 3.121%. 

- Elsewhere 10-Bund spreads have widened: Vs Spanish bonds up 2.4bps at

120.6bps, Vs Portuguese up 2.8bps at 154.7bps, and Vs Greek bonds up 7.9bps at

395.8bps.