Core EGBs have weakened as Italy has....>

EGB SUMMARY: Core EGBs have weakened as Italy has rallied over the course of the

morning, as EGBs in general continue to seek a decisive direction.

- Italian BTPs have had a typically volatile day, but have rallied to near

intraday highs after selling off early: Dec future up 45 ticks at 120.42, having

traded in a range of 119.3-120.52 today.

- 2-Yr BTP yield is down 1.8bps at 1.367% (after high of 1.543%), 10-Yr lagging

the rally, up 1.9bps at 3.495%. 

- Fin Min Tria's testimony to parliament struck a more conciliatory tone re

Brussels, but did nothing to disavow earlier comments by Deputy PMs Di Maio and

Salvini that there would be no changes to budget plans.

- Euribor futures are a little weaker, Dec20-Sep22 contracts off 1.5-2.0 ticks.

- Aug-28 Bund auction went technically uncovered today (and Dec 18 future down

23 ticks at 157.86); Portugal saw decent auction for its benchmark 10-Yr PGB.

- EGB Periphery spreads are down, particularly for Greece, 10-Yr in 10.9bps vs

Bunds at 392.5bps.