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Italian markets were again the..........>

EGB SUMMARY
EGB SUMMARY: Italian markets were again the subject of intense focus in the EGB
space. The spread of 10Y BTPs over Bunds opened the day with an 18bps rally
compared to Monday's high, then sold off sharply after the US open (saw a BTP
future block sale of 1,983 IKM8 @ 132.43 at 1334BST which may have contributed).
- Concern mounted further on reports just before 1500BST that eurosceptic
economist Paolo Savona could be named Finance Minister in the new 5-Star/Lega
coalition, helping push BTP spread from 178.0bps to 182.2bps. Then around
1545BST on no apparent news, the spread compressed sharply again, down to
178.1bps. On the day, spread is 8.5bps tighter.
- The 10Y BTP yield is down 5.2bps to 2.337%, with the other 3.3bps of spread
narrowing due to Bund yields rising to 0.556%, as the safe-haven bid eased a bit
compared with Monday.
- Fairly quiet day for Euribor, w little overall movement along the strip. Red
and green contracts half a tick lower, while blues are 0.5-1.0 lower.
- Potential market movers on Wednesday include a possible Italy PM-designate,
France/Germany/EMU PMI data, and Germany auctioning a new Schatz.

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