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

EGB SUMMARY: - The rally in German bunds petered out by mid-morning, with

sideways trading throughout the afternoon session. The 2-year benchmark trades

at -0.617% from a high of -0.599%, while the 10-year trades at 0.388% down from

0.414%.

- The French OAT curve has flattened since the open with the 2s10s spread

narrowing to 118.4bps from 119.5bps. The 30-year trades at 1.662% down from

1.671% and has underperformed the curve.

- The sell-off in Italian BTPs stabilised by midday with the 2-year trading at

0.999% off a high of 1.024%. The longer-end has outperformed and the curve has

flattened on the day.

- Spanish government bonds have traded sideways in a relatively tight range

since mid-morning but have sold off over the last hour. The 10-year yield has

surged to 1.593% from a daily low of 1.582%.

- Euribor futures are off 0.5 ticks in the whites and up 2.0-2.5 ticks in

greens/blues.