EGB/GILTS SUMMARY It has been a........>

BOND SUMMARY: EGB/GILTS SUMMARY It has been a fairly range bound session for the

German Bund (29 ticks range), albeit better bid on FTQ. German final GDP was

released in line with survey, and provided very little ion term of volatility

for Bunds. Focus in Europe is on the Italian Government, with investors hoping

for it to be formed by tomorrow. BTP were up over 100 ticks, pushing the

Bund/BTP spread to levels last since in July at 187bps. Few headlines hit our

screens, with reports that Italian coalition were collapsing. BTP are now off

their lows on Italian developments and the German spread is slowly edging back

circa 192bps (5.7bps tighter vs 10bps tighter pre headlines).

GILTS: The contract started the session better bid on the back of Bunds, but

especially BTPs, but soon dipped lower on the back of better GBP buying. Indeed,

the pound has started its FX session on the front foot against most G10 and EM

currencies. Gilts are now off their lows and 32 ticks up on the day and still

within ranges. - Bund futures are up 0.12 today at 178.64 with BTP futures up

0.61 at 143.15 and OAT futures up 0.16 at 170.08.