Further compounding the gloomy..........>

EGB SUMMARY: Further compounding the gloomy narrative around global trade and

the impact on the euro area, the European Commission has cut its growth

forecasts for the bloc and substantially downgraded its 2019 projection for

Germany to 0.5% from 1.1%.

- Following recent hawkish comments from Austrian Chancellor Sebastian Kurz who

urged the EU to take a tough line on budget indiscipline among member states,

Italian Finance Minister Giovanni Tria has stated that Italy has reaffirmed that

Italy will meet its EU budget commitments. 

- The German bund curve has flattened sharply on the day with the 2s10s spread

narrowing ~3bp.

- French OATs have rallied across the curve with 2-/3-year benchmarks slightly

lagging. Current yield levels: 2-year -0.559%, 5-year 0.278%, 10-year 0.326%,

30-year 1.384%.

- Italian BTP yields pushed higher again from around 1200, while the curve is

relatively flat on the day.

- The Euribor futures strip has flattened with greens/blues up 2.5-5.0 ticks.