There are only small movements so far...>

EGB SUMMARY: There are only small movements so far today but within these tiny

changes European curves are only loosely correlated. The German curve is bear

flattening, the French curve bull steepening and the remainder largely following

flopping around doing next to nothing.

- So far, the 10Y Bund yield is +1bp at 0.394% and the 2Y Schatz is +0.02% at

-0.627%, the highest Schatz yield since July.

- Italy sells E2.0-2.5bln of BTP 0.9% Aug-22, E1.0-1.5bln of BTP 2.05% Aug-27,

E0.5-1.0bln of BTP 2.2% Jun-27 and E1.5-2.0bln of CCTeu Apr-25 later this

morning. There was a good concession built in yesterday but BTPs are

outperforming this morning and the 10Y spread to Germany is 2bp tighter at

151.4bp.

- The exceptionally volatile EURUSD 3m cross currency basis swap is normalising

and the 5Y basis swap is at -35bp, its highest since end October.

- The ECB releases its monthly bulletin at 0900GMT, not normally a market

mover....but interesting.

- Datawise, MNI Chicago PMI and initial claims are the only releases of note.