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Core EGBs have drifted lower while......>

EGB SUMMARY: Core EGBs have drifted lower while periphery EGBs have rallied in a
risk-on move Tuesday.
- German curve bear steepening 2-Yr yield up 1.3bps at -0.63%, 5-Yr is up 1.2bps
at -0.495%, 10-Yr up 1.7bps at -0.07%, 30-Yr up 2.1bps at 0.584%.
- Peripheries enjoying a nice rally, led by Italy: BTPs/Bund 10-Yrs in 7.3bps at
271.4bps; Spain in 3.2bps while Portugal and Greece 4-5bps tighter.
- Most noteworthy flow of the afternoon has been cheap downside in Schatz, DUN9
(Jul) 111.90/111.80/111.70 put fly bought for 1 in 19.5k all day.
- Euribor futures strip almost completely flat, Golds lagging (-0.5/-1.0 ticks).
- On the issuance front, Germany goes to auction Wednesday, selling E3.0bln of
the benchmark 10-Yr Bund. Portugal announced a PGB swap for tomorrow, and will
follow through with a Panda bond sale next week.
- Latest futures levels:
* Jun Bund futures (RX) down 21 ticks at 166.58 (L: 166.45 / H: 166.9)
* Jun BTP futures (IK) up 53 ticks at 130.05 (L: 129.28 / H: 130.11)
* Jun OAT futures (OA) down 10 ticks at 162.76 (L: 162.58 / H: 162.93)

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