We can't exactly write a 'War and.......>

EGB SUMMARY: We can't exactly write a 'War and Peace' sized description of EGB

commentary this morning because very little has happened. Japan was closed

overnight and the market is waiting for the FOMC and all-important dots later.

- In Italy, there appears to be some movement on the political front in that

Berlusconi has opened the door to a pact with the 5-Star movement. It is said

that the Pentastellantes would get the speaker of the Lower House and Forza

Italia would appoint the speaker in the Senate on Friday.

- At 0748GMT, there was a 1329 block trade that looked like a sale. Indeed,

Italian paper is softer this morning on the prospect of two populist parties

leading Italy forward. The Bund-BTP spread is around 1bp wider.

- Later this morning, Germany sells E3bln of its 10Y benchmark. The past two

auctions have been technically uncovered. MNI Pi calculations show that there is

now a very long position in the Bund contract.

- There are no significant data releases. At 1800GMT tonight there is the FOMC

decision, alongside the summary of economic projections and pressie.

- The 2Y Schatz is unchanged at -0.586%, the 10Y +0.3bp at 0.588%.