A heavily subscribed Spanish 10-year....>

EGB SUMMARY: A heavily subscribed Spanish 10-year bond has punctuated what has

otherwise been a relatively quiet session for EGBs. E10bln of the new issue was

allotted, with the order book swelling to E46.5bln. The 10-year benchmark had

been gaining ground from 1100GMT, but has sold off since 1500GMT - currently

trading at 1.345% up from 1.327%.

- The longer end of the German Bund curve has been rallying since mid-morning

and the curve has flattened. The 30-year has outperformed the curve on the day

with the yield trading down 2.1bps and the 2s30s spread narrowing to 142.5bps

from a high of 144.1bps.

- The French curve has similarly flattened on the back of the long-end

outperforming. Current yield levels: 2-year -0.483%, 10-year 0.641%, 30-year

1.590%.

- The Italian curve has traced out a similar path to Bunds and OATS with trading

ranges relatively contained. The 3-year benchmark has outperformed on the day. 

- Euribor futures are broadly flat in whites and up 1.0-2.5 ticks in

greens/blues.