Peripheral and core markets are.........>

EGB SUMMARY: Peripheral and core markets are moving in opposite directions on

Thursday; German yields are down by around 1bp across the curve but Spanish and

Italian yields are all around 1bp higher in parallel curve movements.

- Volumes are on the thin side, despite the approach of contract rolls and the

Spanish, French and Gilt auctions later this morning. No doubt the poor weather

will be playing a part in this.

- This morning has already seen the Spanish manufacturing PMI that surprised to

the upside at 56.0 from 55.2. Other PMIs will follow culminating with the

Eurozone at 0900GMT.

- Auctions begin with Spain at 0930GMT selling 3.5-4.5bln of Jan-21, Oct-22 and

Oct 28 nominals and SPGBei 1% Nov-30 for E250-350mln.

- France follows at 0950GMT with 8.0-9.0bln of 4 lines.