Plenty of action across the EGB and.....>

EGB SUMMARY: Plenty of action across the EGB and rates space as a weak EMU

inflation print this morning for April continues to be digested. Jun18 bund

futures up 69 ticks on the day and 86 from the low at 159.28.

- Big flattening in Bunds curve as 2s10s fell 3.54bps to 111.58bps. 10Y doing

the heavy lifting, with yields down 4.8bps to 0.5326%.

- Italian political risk potentially provided a further catalyst for risk-off as

PD leader Martina reportedly ruled out potential support for either 5-Star or a

centre-right government, raising risks of snap elections. BTP/Bund spreads a

little off the day`s highs, at 121.19bps. 

- Euribor futures strip flattened significantly with buying of blues

accelerating as the day drew to a close and whites flat. Dec21 Euribor is set

for its second-strongest strongest day in 2018, up 6.5 ticks to 99.215 on

record-high daily futures volume for that contract (over 87k), about 15k traded

within a few minutes after the weak CPI release this morning.

- Dec20 breaking higher from a technical perspective, and set to finish at

four-and-a-half month high (99.605). Short end largely anchored.