• 1/2 cup warm water
• 1 package active-dry yeast
• 1/2 tablespoon sugar
• 1/2 cup milk
• 2 cups bread flour, plus more for dusting
• 1 tablespoonkosher salt
• 1/4 cup olive oil
• 1 large egg
• 1 teaspoon water
• 1/2 cup pesto sauce

Directions:

1. Combine the water, yeast, and sugar until blended. Let stand in the bowl for about 5 minutes until the mixture appears foamy.

2. Add the milk (at room temperature), olive oil, and salt to the yeast and mix until just combined. Add the flour, 1 cup at a time, mix after each addition until combined into a homogeneous mass.
3. Scrape the raggedy dough from the edge of the mixer bowl. Knead for 5 to 8 minutes. The dough will be less sticky and become smooth on the surface. It will clear the sides of the bowl.
4. Cover dough with a large kitchen towel and set aside in a warm spot in the kitchen. Allow to rise for 1 hour until it has almost doubled in size. The dough should be smooth and puffy-looking.
5. Preheat the oven to 200°C and prepare egg wash by whisking the egg and water in small bowl and set aside.
6. When the dough has risen, lightly flour a work surface. Turn the dough out onto it and divide it into 3 equal pieces.
7. Lightly flour a rolling pin. Roll one piece of dough into a rough 8-inch square. It should be about 1/8 inch in thickness.
8. Spread pesto on the dough, leave a 1/2-inch border uncovered. Use a pastry brush to brush a small amount of the egg wash over the exposed edge.
9. Lift up the pesto-covered edge and roll it up, as tightly as possible. Pinch the seam closed with your fingertips. Gently roll the tube back and forth until it spreads lengthwise to about 10 inches long.
10. Line up 3 rolled tubes on a sheet of parchment, positioning the thin ends toward you. With a very sharp, long knife, make a lengthwise slash through each, cutting a deep slit halfway down the depth of the tube; make sure not to cut all the way through to the bottom.
11. Braid the tubes together, crossing one of the outer tubes gently over the middle one. Then cross the other outer tube up and over the new middle one. Repeat, working your way down to the end. Half of the tube should be braided. Then turn the parchment paper around and braid the other side, from the center point to the end, so that the entire loaf is braided. Tuck under ends if desired.
12. Let the bread rise for another 30 minutes before baking.
13. When the loaves have risen, uncover and brush well with the egg wash.
14. Bake for 10 minutes. Reduce the oven temperature to 160°C.  Bake for an additional 30 to 35 minutes, turn the pan 180° from its original position every 15min to ensure even baking, bake until the bread is brown and crusty.