Core EGBs have traded in................>

EGB SUMMARY: Core EGBs have traded in directionless fashion Friday, though

Italian yields have rallied sharply ahead of tonight`s ratings review by Fitch.

- Eurozone August flash inflation data on the soft side of expectations (2.0%Y/Y

vs 2.1% median fcast) has helped boost Bunds after a weak start, leaving them

largely unchanged. 2-Yr yields are 0.6bps higher at -0.595%, with 10-Yrs up

0.1bps at 0.347%.

- Italian spreads over Bunds have retreated from Thursday / overnight highs,

with 2-Yrs last 3.3bps narrower at 192.5bps, vs around 200bps yesterday.

Attention is on Fitch ratings review tonight after US markets close.

- Spanish and Portuguese 10-Yr spreads/Bunds a little tighter as well, by 1.4bps

and 1.0bps respectively, though Greece has moved 1.4bps wider.

- French OATs are broadly flat on the day, with the belly underperforming, yield

up 0.5bps at 0.042% (2-Yr and 10-Yr up less than 0.2bps).

- The Euribor futures strip is a little stronger, up 0.5 ticks across the board.

- Apart from the Italy review, ECB Guindos speaks after hours, and today sees

further UK-EU Brexit talks.