Core FI has resumed its downtrend.......>

EGB SUMMARY: Core FI has resumed its downtrend after a morning reprieve, with

periphery EGB spreads joining in as well over the afternoon.

- The tone was set via issuance and equity gains, the latter of which have

accelerated over the course of the day. Stronger-than-expected Italy/Spain

Services PMI this morning didn't move the needle much.

- Italy's 10-Yr syndication raised EUR14bln, well above the EUR10bln most

expected, on EUR108bln in demand. Spreads vs Bunds peaked in early afternoon but

have been coming down steadily since then as Bunds weakened.

- Indeed, Bunds dropped from session highs (up 1 tick on the day) to lows in the

afternoon, with the curve reversing early flattening.

- ECB decision tomo is in focus: contact us if you haven't seen the MNI preview.

** Latest levels:

* Jun Bund futures (RX) down 71 ticks at 171.15 (L: 171.1 / H: 171.87)

* Sep Gilt futures (G) down 60 ticks at 136.32 (L: 136.24 / H: 136.76)

* Jun BTP futures (IK) down 54 ticks at 141.48 (L: 141.24 / H: 142.09)

* Jun OAT futures (OA) down 62 ticks at 167.29 (L: 167.25 / H: 167.89)