- German bunds have had a choppy........>

EGB SUMMARY: - German bunds have had a choppy start with the curve a touch

steeper. The 2s10s spread has edged up to 101.2bps from a low of 98.9bps.

- The French OAT curve has also steepened slightly.

- With concerns over the government's budget plans continuing to rumble on, the

short end of the Italian BTP curve has sold off. The benchmark 2-year BTP yield

has pushed up to 1.1149% from a low of 1.058%. A report in La Republica

suggesting that the EU Commission will reject Italy's budget proposal in

November has further fuelled uncertainty over the budget.

- The Spanish curve has flattened since the open with the 2s10s spread narrowing

to 169.3bps from a high of 170.6bps. The Spanish Manufacturing PMI for September

came in weaker than expected at 51.4 vs 52.6 survey.

- The Euribor futures strip has flattened with whites down 0.5 ticks and

greens/blues flat to 0.5 ticks higher.