- German bund yields have drifted.......>

EGB SUMMARY: - German bund yields have drifted higher since mid morning with

limited overall movement in the curve. The benchmark 2-year bund trades at a

yield of -0.564% up from a low of -0.578% and the 10-year trades at 0.429% up

from 0.407%.

- The French OAT curve has flattened during the session with the 2s10s spread

narrowing to 115.6bps from a high of 119.5bps.

- The early morning sell-off in Italian BTPs reversed course during the day,

although renewed selling pressure has emerged over the past hour. The 2-year BTP

trades at 1.404% from a high of 1.580% while the 2s10s spread has widened to

197.99bps from a low of 182.9bps and in line with opening levels. The political

newsflow throughout the day has been erratic and often conflicting, with little

of substance. 

- Spanish bonds have rallied since the morning, with outperformance at the short

end causing the curve to steepen. The 2s10s spread has traded up to 170.0bps

from 165.7bps.

- The Euribor futures strip has flattened with greens/blues up 2.0-3.5 ticks.