Periphery debt remains under............>

EGB SUMMARY: Periphery debt remains under significant pressure following the

release of the would-be Italian coalition government`s economic agenda. 

- Italian 10Y BTP yields hit a 10-month high of 2.22%, which could presage

further weakness as 2.20% represents a 3-year downtrend in the yield. Beyond

that, looks like little in the way of a move to the mid-2.30s%.

- Spreads to 10Y Bunds 9.8bps wider in Italy, 6.6bps Portugal, 3.3bps Spain.

- If anything the flight to safety has been relatively limited, with Bunds

picking up a decent bid in the morning but largely flat on the day. Jun18 Bund

future up 8 ticks to 157.95. 

- Belly of the German curve outperforming, with 5s down 0.1bps. 2s10s have

flattened 0.4bps while 10s30s are out 1.0bps.

- A bit of a lift at the Blue end of the Euribor futures strip, up 1.5-2.0

ticks.