Periphery EGBs are weakening after a....>

EGB SUMMARY: Periphery EGBs are weakening after a strong relief rally at the

beginning of the day, but spreads overall remain tighter as Bund yields have

ticked higher.

- After rising earlier on fading risk aversion, Bund yields have been fairly

range-bound, despite strong German ZEW and Q2 GDP data alongside EMU flash GDP

beating expectations. Bund curve slightly steeper, 2-yr yields up 0.8bps at

-0.638% and 10-yrs up 1.8bps at 0.329%.

- Italian BTPs have faded an earlier rally triggered reports that Italy PM Conte

and top ministers held 2019 budget meeting on Monday and agreed to cut the debt.

- 2-yr BTP yields initially dropped over 13bps to 1.190%, but have crept up to

1.297%, nearing Monday's 1.332% high. Spreads still narrower by 5.3bps vs Bunds.

- Spreads a little narrower among other peripheries, with Spanish 10-yr in

4.4bps vs Bunds, and Portugal in 2.5bps.

-Euribor futures are fairly static, with contracts from Mar0-Jun2 off 0.5 ticks.