Core EGBs have erased all of the........>

EGB SUMMARY: Core EGBs have erased all of the day's early losses as the earlier

recovery in equities has faded.

- The Dec 18 Bund future is now up 15 ticks at 158.50, having traded in a range

of 157.95-158.61 today. Have seen some modest bull steepening in the German

curve, with 2-Yr yield down 1.7bps at -0.554%, 5-Yr is down 2.1bps at -0.09%,

10-Yr down 1.2bps at 0.506%, and 30-Yr down 0.9bps at 1.128%.

- This comes as DAX remains near multi-month lows after an earlier rebound, up

13 points at 11,555, but 140 points off high. EUR also off 0.3% at 1.1555.

- With the EC deadline for budget submissions coming up Monday, all eyes on

Italy, and the Dec18 BTP future is up 30 ticks at 120.09, in middle of

119.67-120.46 range seen today.

- Spain arguably the bigger story, losing 4.4bps of ground vs 10-Yr BTP spread

at 187.8bps amid concerns over a populist budget (and Spanish market holiday).

- Euribor futures fairly flat, up 0.5-1.0 ticks across the strip.

- Portugal rating reviewed by Moody`s after U.S. market close Friday.

- ECB`s Mersch and Draghi set to speak at IMF meeting in Bali over the weekend.