The resumption of trading after.........>

EGB SUMMARY: The resumption of trading after Tuesday's holiday has brought a

modest risk-on tone, with Eurozone economic data (GDP, PMIs) largely in line

with modest expectations. German 10-yr Bund yield is 2.7bp higher at 0.586%,

following USTs as they look to test 3.00% anew and alongside falling Gilts.

- Periphery has outperformed. Spanish PMI was on the positive side, alongside

Italy President Mattarella apparently ruling out fresh elections. This helped

10-year BTP/Bund spreads fall to 117.8bps, down a little under 5bps from

Monday's pre-holiday close albeit off mid-morning lows around 117.2bps.

- BTPs are outperforming Bonos, with the spread of 10s falling around 3bps to

last trade at a low of 47.4bps.

- Interestingly, snippets on prices/inflationary factors in today's

manufacturing PMIs suggests inflation pressure could be building in the pipeline

in France, Germany and Italy. Euribor futures are down 0.5/1 ticks across the

strip at session lows.