EGB SUMMARY: The EGBs afternoon.........>

EGB SUMMARY: EGB SUMMARY: The EGBs afternoon session was fairly quiet, with

light data flow and most attention apparently on Thursday`s ECB meeting. There

was some modest steepening in the Bunds curve, with 10y slightly weaker on the

day, up 0.6bps at 0.638%, while 2y yields edged lower by 0.2bps to -0.554%.

- EMU periphery bonds began the day much tighter to Bunds but lost ground as the

day went on. 10-year BTP/Bund spread is flat at 114bps after falling below

111bps at one point this morning; Bonos/Bund action was similar.

- Consensus is for a straightforward ECB GC meeting Thursday, with June or July

eyed for major decisions on QE and forward guidance.

- EGB curve flatteners appear to be in vogue, with Barclays and BNP Paribas

seeing a bund sell-off unlikely in the near-term, and 10s/30s OAT flatteners

being attractive. Likewise, Nomura likes Gilt 10s20s flatteners.

- MNI PINCH calculate basically zero implied chance of a rate move until at

least Dec 2018, though the rate path appears to be inching higher, with a 42%

chance of a 10bp rate hike in Mar 2019 and a 82.5% in June 2019 up from 35% and

69% seen towards the end of last week.