EGBs are stronger amid weak EMU.........>

EGB SUMMARY: EGBs are stronger amid weak EMU inflation data and signs that the

US Fed could be more dovish than previously expected.

- Dec 18 Bunds are up 37 ticks at 161.27, just off daily high of 161.34.

- 10-Yrs outperforming, yield down 2.3bps at 0.326%; 2-Yr down 0.7bps at

-0.592%, 5-Yr down 1.6bps at -0.253%, 30-Yr down 2.2bps at 0.996%.

- Bunds appeared to get a lift after news emerged around 0900GMT of prosecutors

raiding Deutsche Bank headquarters in Frankfurt.

- BTPs have traded higher, Dec 18 future up 32 ticks at 124.25. 2-Yr yield down

1bps at 0.889%, 10-Yr down 2bps at 3.236%.

- Greece outperforming EGB periphery, with spread of 10-Yrs vs Bunds down 4.9bps

at 394.2bps. FT reported earlier that Greece has postponed a sale of 10-Yr bonds

after Italian concerns pushed up yields.

- ECB semi-annual Financial Stability review released this morning, saying

financial market vulnerabilities have increased since May, amid downside risks

to global growth becoming more pronounced.

- All eyes now on German Oct inflation data out at 1300GMT.