With risk-off sentiment returning.......>

EGB SUMMARY: With risk-off sentiment returning overnight as equities tank, core

EGBs have rallied early Thursday, with periphery spreads widening.

- The Mar 19 Bund future is up 27 ticks at 163.12, having traded as high as

163.29. The 2-Yr yield is down 0.7bps at -0.611%, 5-Yr is down 1.3bps at

-0.301%, 10-Yr is down 2bps at 0.257%, and 30-Yr is down 2.1bps at 0.907%. 

- Upside surprises in German data out today, M/M factory orders for Oct up 0.3%

vs -0.4% consensus; Nov Construction PMI at 51.3 from 49.8 in Oct.

- Mar 19 BTP future is down 5 ticks at 123.96, middle of its trading range today

of 123.78-124.3. 10-Yr underperforming the curve, yield up 1.5bps at 3.076%.

- PM Conte set to meet w EU`s Juncker next week in Brussels with a revised

budget plan, though Deputy PM Salvini seemed adamant this morning that budget

reforms would not be delayed.

- 10-yr periphery spreads wider to Bunds: Italy out 3.5bps at 281.9bps, Spain

1.3bps at 119.5bps, Portugal 1.7bps at 153.6bps, Greece 1.7bps at 389.6bps.

- Issuance includes France selling E3-4bln of M-T OATs, and Italy tapping 2.3%

Oct-21 BTP via syndication (alongside a buyback of multiple S-T bonds).