EGBs had been a bit of a sideshow to....>

EGB SUMMARY: EGBs had been a bit of a sideshow to the rally in equities and oil

until the announcement of the 10-year BTP syndication.

- The new BTP bond is due to launch in the "near future" - in our opinion

probably tomorrow. This saw BTP futures instantly fall around 70 ticks before

recovering some losses to be 50 ticks lower than immediately prior to the

announcement. These moves almost doubled the day's trading range for BTPs. Bund

futures spiked higher, moving to their highs of the day on the announcement.

- The ECB also released data on PEPP purchases in the month of May. As expected,

Italy and Spain saw more purchases than the capital key would have suggested.

France saw a lot less purchases than the capital key would suggest. Most

interestingly, Germany also saw a larger proportion of purchases than the

capital key would suggest. ** Latest levels:

* Jun Bund futures (RX) up 29 ticks at 171.94 (L: 171.67 / H: 172.15)

* Jun BTP futures (IK) down 87 ticks at 141.92 (L: 141.79 / H: 142.78)

* Italy / German 10-Yr spread 3.9bps wider at 192.8bps

* Jun OAT futures (OA) up 25 ticks at 167.97 (L: 167.76 / H: 168.17)