EGBs have lost ground at the short......>

EGB SUMMARY: EGBs have lost ground at the short end of the curve as eurozone

composite PMI data this morning remained just above 50, largely due to French

revisions and another upside surprise from Spain.

- The Italian economy remains a troubled with as composite PMI fell back below

50 to 48.8. 

- Despite the poor PMI data the Mar-19 BTP future has gained 15 ticks today at

128.04, and is roughly in the middle of it's days range. 

- The BTP curve has steepened between the 2yr/5yr section, with flattening in

the 5yr/30yr where the long dated bonds have been less affected by the PMI data.

- 2-Yr BTP yield is up 1.5bps at 0.433%, 5-Yr up 1.7bps at 1.691%, 10-Yr

unchanged at 2.734%, and 30-Yr down 0.6bps at 3.545%.

- German bund futures have sold off slightly and are currently down 16 ticks at

165.12.

- The relative sell off in bunds has seen periphery 10yr spreads vs bunds

narrow: Spanish spread down 1.3bps, Italian spread down 1.5bps, and Greek spread

down 2.8bps.