Periphery EGBs continued weakening......>

EGB SUMMARY: Periphery EGBs continued weakening throughout the day as equities

faltered, and have shrugged off a late bounce in stocks.

- BTPs have surrendered all of the gains of the preceding 2 days and then some,

with the Dec 18 BTP future down 69 ticks at 119.61, having traded as high as

120.43 today. Bund Dec18 meanwhile up 12 ticks at 159.28.

- Italian curve is bear flattening as it usually does in risk-off days, with the

2-Yr yield up 7.3bps at 1.421%, 10-Yr up 6.6bps at 3.614%.

- Spain/Germany 10-Yr spreads hitting highest in a year, up 8.2bps at 127.0bps,

in line with the Italian move (also up 8.1bps at 316.8bps, highest since 2013).

- Portugal outperforming modestly, out 6bps at 154.7bps, and Greece further out,

12.3bps at 398.7bps.

- EU summit concluding without any real answers on the Italy fiscal situation,

though that is as expected: post-conference, EU Juncker said the EC hadn't made

a decision on the budget submission and would examine it 'without prejudice'.

- Euribor fairly flat across the strip all considered, just 0.5-1.0 tick moves.

- Fairly quiet finish to the week, gearing up for next Thursday's ECB meeting.