Core EGBs have rallied sharply over.....>

EGB SUMMARY: Core EGBs have rallied sharply over the course of Thursday

afternoon alongside US Tsys and Gilts, while periphery gains have faded.

- The Mar 19 Bund future is up 50 ticks at 165.68, having rallied as much as 41

ticks beginning at 1230GMT to 165.71. Tough to see a specific catalyst as it is

not a risk-off move, with equities likewise rallying.

- Earlier, bonds benefited from weak data, including French and Spanish

inflation on the low side, and recessionary Italian Q4 GDP data.

- Friday brings EMU-wide inflation data for January.

- Speaking of Italy, Mar 19 BTP future is up 5 ticks at 129.46, well of the high

of 129.81 earlier. 10-Yr spreads/Bunds 3.2bps wider at 244.2bps.

- Elsewhere, in contrast to 10-Yr BTPs, Spain/Portugal/Greece spreads tighter to

Bunds, by 1.5-3.0bps apiece.

- ECB`s Coeure and Mersch addressed mainly technical considerations rather than

monpol direction; Weidmann up shortly (1600GMT).