EGBs have started Thursday firmly on the.......>

EGBS: EGBs have started Thursday firmly on the back foot with the exception of

Italian BTPs which are supported by early newswire headlines confirming that M5S

and Lega have dropped its request for a debt write off. The rest of the EGB

market are seen weighed by 10-yr Tsy yield rising above the 3.10% level.

- German 10-yr yield is 2.9bp higher at 0.635% while, EGB yield curves are

steeper even the BTP one.

- 2-yr BTP yield has fallen by nearly 7bps while 10-yr is only 2.5bp lower at

2.092%.

- There is a dearth of eurozone data today so attention likely to be on any

further comments from Italy's M5S and Lega and their possible coalition

government and Spain and French bond supply.

- Spain launches a new 5-yr Bono and taps 5.90% Jul-26 Obli and 1.40% Apr-28

Obli, for a total of E4.0-5.0bln. While France taps 3-yr 0.0% Feb-21 OAT and

5-yr 0.0% Mar-23 OAT for a combined amount of between E6.5-E7.5bln. 1-hour later

France then re-open 1.10% Jul-22, 1.85% Jul-27 and 0.10% Jul-47 OAT linkers for

a combined amount of between E1.25-E1.75bln.