There is no strong direction in EGBs....>

EGB SUMMARY: There is no strong direction in EGBs this morning. Core short-end

yields have drifted lower, while the longer end has oscillated more but is

hovering around the open. PMIs have been broadly in line with consensus, but the

political newsflow in Germany dominates.

- The benchmark German 2-year bund yield has edged down to -0.672% from -0.665%

at the open, while the 10-year trades at 0.305% up marginally from 0.302%.

Coalition party leaders will meet today in a bid to defuse the escalating rift

that threatens to topple the government.

- French 2-year OAT yields have traded down to -0.469% from -0.452% at the open

while the 10-year trades at 0.669% from a session low of 0.658%.

- Italian BTP yields have pushed higher. The 2-year yield has edged up to 0.760%

from 0.693% at the open, the 5-year up to 1.797% from 1.729% and the 10-year up

to 2.742% from 2.6796%.

- The EURIBOR futures strip has flattened with Reds through to Blues up 0.5-1.5

ticks.