German FI futures operate just below..........>

BUNDS: German FI futures operate just below settlement levels as we head towards

traditional European hours; Schatz -0.5 tick, Bobls -2.0 ticks, Bunds -9 ticks.

ECB's Hansson spoke with RTRS late Monday, with a focus on the upcoming round of

TLTROs. Hansson noted that "you don't want to simply copy-paste the previous

facility because the objective reality is so much better than it was at that

time. I think they have to be a little bit less generous than they were before."

Focus Monday fell on Italian fiscal matters. Deputy PM Salvini struck an

aggressive tone re: tax cuts & opposing austerity, before BBG sources suggested

that "the EC is considering proposing a disciplinary procedure for Italy next

week over its failure to rein in debt, which could pave the way for a EUR3.5bn

penalty." Salvini's reply, if the EU sends a letter then the gov't we will reply

by saying that Europe's era of uncertainty & unemployment is over. BTPS notably

underperformed. Greek paper benefitted from the calling of snap elections, with

New Democracy seen as more business friendly than the incumbent Syriza.

- Focus today moves to an address from ECB's Villeroy & 2-Year supply from

Germany. Elsewhere, various domestic & EZ confidence metrics will hit.