EGBs are on the back foot to begin......>

EGB SUMMARY: EGBs are on the back foot to begin the week, with

stronger-than-expected German data setting the tone early Monday.

- Highlight of the day so far has been better than expected German IFO, which

has helped row back some concerns posed by last week`s shock PMI figures.

- Bund futures grinding lower, Jun 19s down 30 ticks at 165.44. Cash curve

steepening slightly; 2-Yr yield is up 0.2bps at -0.563%, 5-Yr is up 0.9bps at

-0.39%, 10-Yr is up 1.1bps at -0.004%, and 30-Yr is up 1.5bps at 0.617%.

- Not much movement in periphery EGBs, relatively speaking.

- Spread of 10-Yr Italian BTPs vs Bunds up 0.8bps at 247.2bps, Spain almost flat

(0.1bps wider), Portugal 0.5bps wider, Greece 0.6bps narrower.

- ECB`s Hansson said in interview with MNI published today that the Eurozone

slowdown may persist, and that QE could return. Also said it may be too early

for an ECB monetary policy review, and TLTRO terms may not be announced in June.

- ECB`s Coeure said this morning that German yields have been driven down more

by savings dynamics than central bank policy; noted that ECB is not yet at the

limit of what it can do.