EGBs are trading in a fairly narrow.....>

EGB SUMMARY: EGBs are trading in a fairly narrow range, with the long end of

curves under the most pressure.

- The Dec 18 Bund future is down 17 ticks at 158.99, near day`s highs of 159.1.

Some curve steepening, with Schatz flat and Bund/Buxl widening: 2-Yr is

unchanged at -0.577%, 5-Yr yield is up 0.7bps at -0.125%, 10-Yr up 1bps at

0.471%, and 30-Yr up 1.4bps at 1.109%.

- Markets a little more cautious of Italy, but not substantially, with Dec18 BTP

future off 34 ticks at 119.96, right in middle of day`s range of 119.79-120.43.

- Again, long end under most pressure, 2-Yr yield up 0.3bps at 1.351%, 10-Yr up

2.9bps at 3.577%.

- Notable widening in Greece 10-Yr to Bunds, out 8.8bps at 395.1bps, vs IT/ES/PT

0-2bps wider.

- News that EC will send letters to Rome and Madrid asking for 'clarification'

on Italian and Spanish budgets looks to have been anticipated, little reaction.

-ECB`s Nowotny speaks at 1100GMT, following attention earlier on his comments

endorsing Weidmann for ECB head job.