Renewed speculation over a more.........>

EGB SUMMARY: Renewed speculation over a more hawkish ECB rate hike trajectory

pushed EGBs lower in early afternoon, with Bunds giving up most earlier gains.

- EGBs faltered shortly after 1300BST on a Reuters source story quoting ECB

policymakers in a split over the timing for a 2019 hike, with the central

disagreement over the meaning of maintaining rates `through summer`.

- Bund Sep8 futures remain up 8 ticks on the day at 162.46, but well off the

high of 162.80 reached amid concern over US/China trade tensions.

- Longer-dated Euribor futures gave up all earlier gains. Blue contracts dropped

a tick following the ECB story, now flat on the day; Reds/Greens off 0.5 ticks.

- MNI PINCH calculates 4bps of a hike in the ECB deposit rate in September 2019

up from 3.5bp prior to the story hitting the wires. For October, 8.5bp of rate

hikes priced vs 8bps previously, and for December it is 13bps vs 12.5bps.

- Periphery EGBs weakened but have recovered somewhat; 10-year Italian BTP

yields up 2.3bps at 2.694%, with Spanish 10s up 2.0bps at 1.298%.

- Following well-covered auctions today for Portugal and Germany, Italy and

Ireland go to market Thursday, tapping medium/long term issues.