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

EGB SUMMARY: - The rally in German bunds tapered off by mid morning, with

sideways trading dominating the rest of the session. The benchmark 2-year bund

trades at -0.544% down from a high of -0.523% and the 10-year trades at 0.536%

down from 0.574%. The 2s10s spread trades at 107.3bps down from a high of

109.1bps.

- French OATs have traced out a similar course during the day, with the curve a

touch flatter since the open. The 2s10s spread has traded down to 123.1bps from

124.3bps.

- The sell-off in Italian BTPs lost momentum, but yields are still hovering

around the day's highs. the biggest moves have been seen at the front end, with

the 2-year trading at 1.545% with a 1.366/1.628% trading range for the day.

- Spanish yields have drifted higher through the day with slight

underperformance at the shorter end. 

- The Euribor futures strip has flattened with whites down 0.5 ticks and

greens/blues up 1.0-2.0 ticks.