Core EGBs remain weak as supply and.....>

EGB SUMMARY: Core EGBs remain weak as supply and solid data continue to pressure

quality bonds globally, while Italian BTPs continue their run higher.

- The German ZEW economic sentiment survey for September came in better than

expected, but Bunds shrugged off this news (having anticipated it?), with the

Dec18 futures contract coming off pre-data lows of 159.34 to trade up to 159.58.

Still, the future is weaker on the day, off 20 ticks currently at 159.49.

- Italian BTPs remain the star of the EGB space though have reversed some

earlier gains, with 2-Yr yields down 2.1bps at 0.716% having touched 0.702%

earlier. 10-Yr yields are just 0.6bps lower at 2.904%, off the 2.851% daily low.

- Spreads across the periphery continue to compress vs Bunds, Greece`s 10-Yr in

13bps today at 366.7bps (compared with Spain in 2.4bps and Portugal in 2.6bps).

- Euribor is a little weaker, down 1-1.5 ticks in contracts between Mar20-Jun22,

outperforming Short Sterling and Eurodollars, which are off 2.5-4 ticks.

- Little left on today`s speaker/data docket, but ECB`s Daniele Nouy scheduled

to speak in Strasbourg at 1200GMT.