There is no clear direction in EGB......>

EGB SUMMARY: There is no clear direction in EGB trading this morning.

- The sell-off in German bunds in early trading has since reversed, but bond

yields remain above the open. The benchmark 2-year German bund yield trades at

-0.623%, down from an intraday high of -0.620%. There has been a stronger

pullback in the 30-year, which currently trades at 1.044%, down from a high of

1.058%, but still above 1.041% at the open. The curve has also steepened with

the 2s30s spread narrowing to 165.6bps from 167.1bps.

- Italian BTPs have rallied through the morning. The 2-year BTP yield has traded

down to 0.576% from a session high of 0.656%, while the 5-year and 10-year are

down to 1.625% (from 1.686%) and 2.567% (2.612%), respectively.

- The Spanish curve has flattened with the 2s30s spread falling to 275.1bps from

a high of 277.6bps. This has been driven largely by the long end, with the

benchmark 30-year yield dropping to 2.480% from 2.503%.

- The EURIBOR futures strip has steepened with whites up 0.5 ticks and

greens/blues down 0.5-1.0 ticks.