30-yr part of core/semi-core EGB........>

EGB SUMMARY: 30-yr part of core/semi-core EGB markets are underperforming ahead

of NY opening, weighed by overnight steepening in the US Treasury curve and

continued rise in Eurozone 5Y5Y inflation forward. German 10-yr Bund yield is

2.2bp higher at 0.331%, albeit in light volume and lack of depth to the market,

while 30-yr is 3.0bp higher at 1.15%.

- Eurozone 5Y5Y inflation forward rose to 1.745% fresh 10-month high which some

attributed to rise in long end yields. While comments from ECB Hansson that he

expects the ECB to adjust its communication in the first half of 2018 also seen

weighing on sentiment.

- EU periphery bonds though have enjoyed another solid day, led by a 2.1bp

tightening in Bund/Bonos spread to 110.5bps, despite expectation Thursday's

election will be inconclusive.

- German IFO came in mixed with both business climate and expectations falling

slightly, however current assessment ticked higher and IFO said that German

businesses were "full of festive spirits".