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A fairly calm beginning to payroll......>

EGB SUMMARY
EGB SUMMARY: A fairly calm beginning to payroll Friday. Overnight Trump
announced a set of tariffs but indefinitely exempted Mex/Can. Also could exempt
allies if they spend 2% of GDP on military. Market chatter is that chances of
global trade war have lessened slightly. 
- Soon after the bond open yields started heading higher, first in response to a
number of USD swap paying trades in the 7-10Y area and later a large Bund block
trade: 6,519 RXM9 @ 156.99 at 0914:01GMT.
- Notable quantity of downside option trades in the Bobl contract and the 5Y
initially cheapened on the curve. However, 2-5-10Y EUR swap trade noted
mid-morning has pulled back some 5Y underperformance.
- German, French and Spanish industrial production data all came on the weak
side of expectations for January. Partial explanations seen in mild winter
hitting utility output and index re-jigging in France/Spain.
- Core-peripheral spreads quite stable. Bund-BTP 1bp tighter at 134.4bp,
although 10Y+ BTPs heavy ahead of supply next Tuesday.
- 2Y Schatz is +0.5bp at -0.556%, 10Y Bund is +1.9bp at 0.647%. 

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