EGBs have recovered from session lows...>

EGB SUMMARY: EGBs have recovered from session lows but remain weaker on the day,

with a combination of positive data, supply (France and Spain auctions this

morning), and ECB rhetoric on the hawkish side applying upside yield pressure.

- The Sep Bund future is off 29 ticks at 162.26, though up from the intraday low

of 162.06 reached following mid-morning comments by ECB chief econ Praet

expressing confidence in the eurozone inflation outlook. 

- Periphery EGB yields are also up but spreads are in slightly, the most notable

exception being Italian BTP 2-year spreads which are out 5.5bps at 139.2bps.

- French OATs are off, with the Sep future down 18 ticks at 154.54, though well

up from session lows of 154.23, recovering after decent auction results.

- Euribor futures are weaker, due in part to a BBG sources piece pointing to

earlier ECB rate hikes. Green and Blue contracts are off 3.5 ticks.

- Quiet afternoon data/speaker wise this afternoon in EMU, though attention

likely to be paid to US Services PMI, and FOMC minutes after hours.