- German bunds have had an unsteady.....>

EGB SUMMARY: - German bunds have had an unsteady start to the session following

another disappointing electoral result for the governing coalition, with support

for Chancellor Angela Merkel's CDU party falling 10pp in the Hesse vote. The

long end of the German bund curve has sold off, with the 10-year benchmark

trading at a yield of 0.360% up from 0.3497%.

- French OATs lack direction and the curve is broadly flat. Key yield levels:

2-year -0.432%, 10-year 0.737%, 30-year 1.615%.

- Italian BTPs have rallied from the open following the decision by S&P on

Friday evening to maintain the existing sovereign credit rating, while

downgrading the outlook to negative. The 2-year benchmark BTP yield has pushed

down to 0.948% from 1.092% at the Friday close. 

- The shorter end of the Spanish curve has got off to a weak start, while the

longer end has rallied. The 10-year yield has pushed down to 1.542% from 1.566%

at the Friday close.

- The Euribor futures strip is broadly down 0.5-1.0 ticks.