The tone in EGBs has been risk-on so....>

EGB SUMMARY: The tone in EGBs has been risk-on so far Monday, centred around

global trade optimism, and despite continued Italian political uncertainty.

- Bunds pressured on Trump trade comments at G7 that China called over the

weekend to restart trade talks, and that US hopes to have trade deal with EU.

- German curve bear steepening slightly: 2-Yr yield up 0.4bps at -0.888%, 5-Yr

up 1bps at -0.878%, 10-Yr up 1.1bps at -0.664%, 30-Yr up 0.3bps at -0.124%.

- Sep Bunds (last off 15 ticks) largely unmoved by Aug IFO weakness.

- Italy bears attention as a Tuesday deadline looms for the PD and 5-Star to

reach an agreement on a new gov't, or else snap election likely.

- PD leader Zingaretti said 'hope will happen in coming hours'. Main obstacle

remains over who should become Prime Minister. But 5-Star official said earlier

that no talks planned with PD today.

- Overall, little change in BTP spreads (10-Yr 1.2bps wider at 200.4bps).

- Euribor strip relatively steady. Latest French/Italy futures prices:

* Sep BTP futures (IK) down 39 ticks at 142.25 (L: 142.01 / H: 142.9)

* Sep OAT futures (OA) down 3 ticks at 169.75 (L: 169.61 / H: 170.22)