The core-periphery convergence in EGB...>

EGB SUMMARY: The core-periphery convergence in EGB yield spreads has continued

throughout the day.

- The benchmark 2-year German bund yield trades at -0.642%, down from an

intraday high of -0.626% and near the lows of the day. Having rallied during the

morning session, the 10-year has since sold off with the yield edging up to

0.376% from a midday low of 0.360%. The curve has steepened somewhat with the

2s10s spread widening to 100bps from 99bps at the open.

- The French curve has also steepened, on the back of short-end outperformance.

The 2-year OAT yield has fallen to -0.569% from a high of -0.554%, while the

2s10s spread has increased to 125bps from a low of 122bps.

- Spanish yields have pushed higher, with a more pronounced sell-off at the

longer end causing the curve to steepen. The benchmark 10-year yield has risen

to 1.244% from a morning low of 1.225%. The Italian BTP curve has similarly

steepened with the 5s30s trading up to 200bps from a low of 195bps.

- There has been little overall movement in EURIBOR futures since the open.