/EGBs-GILTS: Bunds and Gilts are off...>

BOND SUMMARY: /EGBs-GILTS: Bunds and Gilts are off day`s best levels but Jun

futures are on pace to end Tuesday at/near contract high closes.

- Jun Bund futures (RX) are up 5 ticks at 167.69, earlier hit contract high of

167.91 as global safe-havens rallied.

- Likewise, Jun Gilts are up 26 ticks at 130.17 but off 130.37 high.

- Italian spreads have come back from wides (10-Yr BTP/Bund 1.4bps wider at

283.5bps, earlier hit 289.0bps), shrugging off headlines that Deputy PM Salvini

would devote `all his energy` to changing EU fiscal rules.

- Earlier, EU`s Moscovici said he does not favour fining Italy re: debt rules.

- Greece underperforming Italy, spread out 2.4bps; Spain/Portugal are in 1-2bps.

- Choppy day for OAT futures, OATM9 last up 3 ticks at 163.89.

- Euribor and Short Stg strips have bull steepened, both up 0.5-1.5 ticks

through Greens, with Blues-Golds up 2-3 ticks. 

- Wednesday sees Germany return to market, re-opening Apr-24 Bobl for E3bln.

- We also get ECB's Mersch and Rehn appearing, plus publication of ECB's

Financial Stability review. Data includes German unemp and France inflation/GDP.