EGBs started the session better bid.....>

EGB SUMMARY: EGBs started the session better bid on the open, with the BTP once

again leading the way following positive developments in Italian politics. 

-BTPs reached record low yields, 10-Yr trading once again below 1% and printing

0.917% low. -Bund saw a quick turn around to the downside, with the move led by

the US Treasury curve with "Risk On" flows going into equity buying. 

- Headlines from MOFCOM'S Gao, confirming that China and the US were in contact

and trying to organise a September meeting, pushed Equities to high of the day,

in turn pushing major Government bonds lower. 

-Germany/Italy 10 year spread fell, with better Bund selling on the back of

Risk, and better BTP buying on the back of the political outlook. 

-Peripheral EGBs are mixed versus the Bund, with of course Italy as well as

Greece the standouts (10bps tighter). - Bund futures are down -0.17 today at

179.13 with BTP futures up 0.62 at 146.15 and OAT futures down -0.22 at 170.58.