EGBs have taken a leg lower following...>

EGB SUMMARY: EGBs have taken a leg lower following relatively hawkish comments

from ECB President Mario Draghi during his European Parliament testimony.

- Having lacked direction for most of the session, German bunds have sold off

over the last hour and a half. The 2-year benchmark trades at -0.5198%% up from

a morning low of -0.543% while the 10-year trades at 0.4995% up from low of

0.450%. The curve has steepened with the 2s10s spread widening to 101.0bps from

98.0bps.

- The French OAT curve has similarly steepened on the back of the longer end

underperforming. The 2s10s spread has traded up to 116.5bps from 113.9bps.

- Italian BTP yields have drifted higher throughout the day. The benchmark

2-year BTP trades at 0.865% up from 0.7495% and the 10-year trades at 2.944% up

from 2.831%. The curve has been relatively flat for much of the day.

- Yields at the longer end of the Spanish curve have had a decent leg up, with

the 10-year trading at 1.5195% up from 1.485%.

- The Euribor futures strip has steepened. Whites are down 0.5-1.5 ticks, blues

down 4.0-4.5 ticks.