EGB yields are being led by declining...>

EGB SUMMARY: EGB yields are being led by declining 30Y yields in almost every

jurisdiction. For Germany, the 2Y yield is unchanged but the 10Y is 2bp lower at

0.39% and the 30Y is 2.5bp lower at 1.281%.

- Peripheral markets are strong and most notable has been the 8.5bp spread

compression between 10Y Germany and Greece to 469bp. 

- Italy is also performing well but there is also confusion as the scheduled

auction was postponed for technical reasons. The Bank of Italy said that the

auction will go ahead at 1145GMT. However, some dealers clearly removed hedges

on the postponement helping BTP to perform. Additionally, the Italian Treasury

is selling the BTP Italia. Orders for the retail offering were last at E1.1bln

and this compares to E1.6bln seen for the whole first day at the BTP Italia

auction in May.

- Belgian debt continued the strong performance from Friday, helped by Friday's

news that the Belgian Treasury cancelled the Nov 20 auction because it has

reached its funding needs.