Global risk-off sentiment is sending....>

EGB SUMMARY: Global risk-off sentiment is sending periphery EGBs weaker, with

Italian spreads blowing out amid a rally in Bunds.

- Seeing extreme weakness and volatility in BTPs, with the curve bear steepening

massively in a move reminiscent of the political crisis a few months ago. 2-Yr

yields up 16bps at 0.929%, with 10s out 9.4bps at 2.883%.

- No trigger seen though headlines Italy's Poste Italiane solvency ratio dropped

sharply with the company citing volatility in BTPs may have contributed.

- Market sources reported large bids in German Schatz futures around the time

the BTP selloff was underway. Curve bull flattening out to 10-Yr, with 2-Yr

Schatz yields down 1.1bps at -0.563%, 5-Yr Bobl yields down 2.3bps at -0.123%

and 10-Yrs down 2.7bps at 0.451%.

- Italy the clear underperformer across EGBs, with 10-Yr out 11.2bps vs Bunds,

compared with Spain out 2.3bps, Portugal 3.5bps and Greece 8.3bps.

- Euribor futures strip seeing a modest rally at the long end, Greens up 1.5-2.0

ticks and Blues up 2.5-3.0 ticks.

- Bank of England decision at midday BST has potential to add to volatility.