- The morning rally in German bunds.....>

EGB SUMMARY: - The morning rally in German bunds has subsided, with yields

edging higher from midday. The benchmark 2-year bund currently trades at -0.585%

up from a session low of -0.598%, while the 10-year has pushed up to 0.385% from

a low of 0.357%. The 2s10s spread has traded up to 96.0bps from a low of 94.1bps

while the 2s30s is up to 163.2bps from 161.0bps.

- The French curve has similarly steepened as a result of the longer end

underperforming. Key levels: 2-year -0.412% (up from a low of -0.425%), 5-year 

0.054% (0.032%), 10-year 0.726% (0.695%) and 30-year 1.621% (1.584%).

- Italian BTPs have rallied across the curve since mid-morning, with the longer

end giving back some of the gains. The 2-year yield has traded down to 1.247%

from 1.315% while the 10-year has pushed back up to 3.169% having hit a low of

3.106%.

- Spanish yields have drifted higher throughout the session and are currently

trading around the day's highs. The 10-year trades at 1.453% from 1.406% at the

open, while the 30-year has sold off to 2.584% from 2.537%.

- EURIBOR futures are flat to 0.5 ticks lower.