- Having rallied during the morning,....>

EGB SUMMARY: - Having rallied during the morning, German bunds have sold off in

the afternoon with long-end underperformance causing the curve to steepen. The

benchmark 2-year yield trades at -0.584% up from a morning low of -0.595% and

the 10-year trades at 0.355% up from 0.331%. The 2s10s spread has widened to

93.2bps from 91.7bps.

- Having initially flattened, the French OAT curve has steepened since

mid-morning. The 2s10s spread has traded up to 116.3bps from a low of 115.3bps,

while the 2s30s has edged up to 210.8bps from 209.3bps.

- The rally in Italian BTPs subsided by midday, with yields at the short end

pushing back above opening levels and the longer end partially reversing the

morning's gains. The curve is 7bps flatter on the day.

- The longer end of the Spanish curve has rallied with the 10-year yield pushing

down to 1.542% from a high of 1.574%.

- The Euribor futures strip has steepened with whites flat/0.5 ticks higher and

greens/blues down 0.5-1.0 ticks.