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Italian bonds have had a................>

EGB SUMMARY
EGB SUMMARY: Italian bonds have had a rollercoaster ride this morning in an
otherwise subdued trading session, with the UK and US observing holidays.
- 10Y BTPs widened to as much as 233.6bps over Bunds after dropping to 189.90
early in the session, last trading 219.3bps, 13.8bps wider. Spreads are entering
levels not seen outside crisis (i.e. 2011-13).
- Former IMF staffer Cottarelli has now been awarded the mandate with which to
construct a technocratic government after turning down the MS5/League
coalition's proposed economy minister Savona, opening the way for a next-year
budget to be passed before fresh elections in 2019. However, Cottarelli said if
he doesn`t win a confidence vote, there would be elections 'after August'.
- In Spain meanwhile, PM Rajoy faces a no-confidence vote Friday. Spain 10Y
outperforming Italy by 6.9bps, but wider by 7.1bps vs Bunds.
- Bunds off their highs, but Jun18 future still up 25 ticks at 161.26.
- Longer-dated Euribor futures bear watching. The generic ER15 (Now Dec21) has
risen from 99.08 midmonth to 99.36, and is testing the downtrend since Sep 16.
- Thin on data, ECB`s Nowotny speaking at 1600GMT.

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