European bonds are trading with.........>

EGB SUMMARY: European bonds are trading with little clear direction, as

political developments and Brexit negotiations are eyed.

- Core EGBs are trading sideways with no clear direction so far Monday. The Dec

18 Bund future is up 17 ticks at 158.7, having traded in a range of

158.57-158.87 today.

- The German curve is flat, with 2-Yr yield down 0.8bps at -0.568%, 5-Yr down

0.8bps at -0.104%, 10-Yr down 0.8bps at 0.49%, and 30-Yr down 1.1bps at 1.113%.

Fairly muted reaction to Merkel's CDU suffering in Bavarian elections Sunday.

- Seeing a bit of weakness in Spanish bonds coming off the long weekend and amid

renewed concerns over Madrid's budget, with the 10-Yr spread vs Bunds up 2.7bps

at 120.5bps (compared with BTPS which are narrowed by 0.9bps to Bunds).

- Italian BTPs have largely given up early gains, with the Dec 18 future up 11

ticks at 120.00, having traded as high as 120.49 today. Latest is that

Government budget approval will have to wait until Tuesday.

- Euribor futures are up a touch, Reds through Blues up 1.5-2.0 ticks.

- No EMU data out Monday, with US retail sales data eyed.