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EGBs and Gilts look to close the.......>

BOND SUMMARY
BOND SUMMARY: EGBs and Gilts look to close the week at multi-month lows, while
Italian BTPs turned sharply lower.
- Dec8 Bund future is off 31 ticks at 159.16, with the German curve taking its
cue from US Treasuries, with the 10-Yr Tsy testing the key 3.00% level.
- Dec8 Gilt future is off 22 ticks at 121.47, with the cash curve steeper, 2-Yr
yield up 1.2bps at 0.816%, 10-Yr up 2.6bps at 1.530%, near 4-month highs. Market
appears slightly more optimistic on Brexit outcome and possibly spooked by BoE`s
Carney talking upside risks to rates post- no deal Brexit.
- Italian BTPs were having a decent day but dropped sharply after 1530BST on
headlines that Lega`s Salvini reiterated disagreement with EU colleagues at a
migration summit in Vienna. The 2-Yr BTP spread over Germany, which has been as
low as 135.8bps, now up to 139.2bps, 1.0bps higher on the day.
- Euribor and Short Sterling were off slightly, with weakness concentrated at
the far end of the respective strips, with Blue contracts off 1.5-2.0 ticks.
- Main focus next week will be on the EU leaders` informal summit in Salzburg on
Thursday, with Brexit negotiation progress eyed.

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