Core EGBs shrugged off soft-ish PMI.....>

EGB SUMMARY: Core EGBs shrugged off soft-ish PMI data this morning and remain

lower, while Italian BTPs are stronger for the third consecutive session.

- German Bunds are set to finish lower, with the Dec8 futures contract off 42

ticks at 159.93. A few factors have conspired to send Bunds lower, including

improving optimism with regard to Brexit following a Bloomberg report around

1400BST that the UK and Germany were rowing back on their exit deal stances.

- Indeed, despite a sharp drop in equities, Bunds remained on the back foot,

with the belly of the curve underperforming amid bear steepening: 2-Yr yields up

2.2bps at -0.561%, 5-Yr up 3.0bps at -0.174%, and 10-Yr up 2.9bps at 0.386%.

- Italian BTPs are stronger as markets were assuaged by further conciliatory

budget rumblings. The curve is bull steepening, with the 2-Yr yield down 13.9bps

at 1.037%, and the 10-Yr down 9.8bps at 2.919%.

- The rest of the periphery is stronger, but underperforming Italy.

- The Euribor futures strip bear steepened, with White contracts up half a tick

and Blues off 2.0-2.5 ticks.

- German factory orders data are Thursday`s highlight.