EGB peripheral spreads have............>

BOND SUMMARY: EGB peripheral spreads have tightened this morning after S&P

affirmed Italy at BBB after the market close on Friday and Spain held elections

over the weekend. The ruling Socialist party increased its seats but its junior

coalition partner Podemos fell back somewhat. The two parties fall short of a

combined majority in a result that was broadly in line with expectations. 10y

BTP-Bund spreads are 4.2bp tighter on the day while Bono-Bund spares are 3.2bp

tighter on the day.

- Moves in core bonds have been more limited with a pickup in Eurozone M3 money

supply but another miss on Eurozone confidence data. The real focus is on the US

inflation data out later today, ahead of the FOMC decision due Wed. In a busy

week, European PMIs/the ISM are due, the BoE Inflation Report will be out on

Thurs and US payrolls are due for release on Friday.

- TY1 futures are down -0-1 today at 123-20+ with 10y UST yields up 0.9bp at

2.508% and 2y yields up 0.6bp at 2.289%.

- Bund futures are down -0.23 today at 165.59 with 10y Bund yields up 1.7bp at

-0.6% and Schatz yields up 1.1bp at -0.592%.