Core EGBs picked up to the day's........>

EGB SUMMARY: Core EGBs picked up to the day's highs as the afternoon progressed,

with periphery instruments reversing earlier gains versus Bunds.

- In a pattern seen over the past few days, EGBs took a sharp turn around the

time of the US crossover. Gains in Bunds accelerated after 1330BST, with the

Sep8 future up from 162.91 to the day's high of 163.11, up 16 ticks on the day.

- Again, EGBs appeared to be tracking US Treasury yields, which hit a July high

at 2.895% just after 1100BST, but have since dropped to 2.853%. This despite

fairly solid US data; global equity weakness a potential trigger.

- Italian BTPs took a meandering course, with the 10-Yr yield dropping 0.8bps

after 1330BST to 2.467%, then rebounding to 2.507%, up 0.2bps on the day.

- The BTP curve has steepened, with 2-Yr yields down 3.1bps at 0.549% and 10-Yrs

up 0.4bps at 2.509%. Respective spreads vs Bunds: in by 3.1bps, and out 1.3bps.

- Spanish 10-Yr spreads vs Bunds are at 7-session highs, having risen by 3.0bps

since 1330BST at 95.0bps, reversing earlier narrowing. 

- The Euribor curve is largely unchanged, 0.5 tick moves in both directions.