European government bonds are edging higher....>

EGBS: European government bonds are edging higher at start of Thursday trade,

likely underpinned by dovish RBNZ and solid 30-yr JGB auction. Markets are thin

though and sentiment can easily change. German 10-yr yield currently at 0.386%,

1.2bp lower while the yield curve is little changed.

- 2-yr BTPs are outperforming the rest of the BTP curve as markets digest latest

comments from Italy's Conte who was reported to have said that it will take

5-years to complete the flat tax and implement citizens income. Overnight though

Di Maio said that they will use rough tactics with the EU in trying to win

concessions on the budget. 10-yr Bund/BTP spread is 0.3bp wider at 251.8bps.

- There is a dearth of Eurozone or UK data today, however ECB is expected to

release its latest Economic Bulletin at 0800GMT, so markets likely to be

headline watching today before US markets open.

- Euribor strip is mixed, strip flatter as white contracts edge 0.5 to 1 tick

lower and blues rise by 1.5 ticks.