EGB curves are steeper with selling.....>

EGB SUMMARY: EGB curves are steeper with selling focused on the 10-Yr segment as

the impact of the Bank of Japan`s decision to let 10-Yr JGBs trade in a wider

range reverberates in global markets.

- 10-Yr Bund yields are trading at the highest levels since mid-June at 0.469%,

up 2.6bps today. The German 2s10s spread is up 1.5bps and touching recent highs,

at 102.6bps, though 10s30s are 0.6bps flatter at 63.4bps.

- Periphery EGBs are trading mixed. Spanish 10-Yrs are underperforming ahead of

supply tomorrow, yields up 3.1bps at 1.431%, putting them 0.5bps wider of Bunds.

- Italian BTP spreads are flat after earlier widening to Bunds, 10-Yr spread

last 227.8bps after earlier trading at 231.6bps.

- A bit of relief seen in Greek bonds after Tuesday's sell-off, with yields on

the 10-Yr flat at 3.964%, bringing the spread over Bunds down 2.6bps. However

this is still up by 5bps prior to yesterday's IMF cautionary note on Greece.

- Modest steepening seen in the Euribor curve, with near-dated contracts a

half-tick lower, and Greens and Blues down 1.5-2.0 ticks.

- With EMU PMIs out of the way this morning, US ISM and FOMC up later.