After an early extreme rally, EGBs......>

EGB SUMMARY: After an early extreme rally, EGBs stabilised within an hour of the

market open and have been trading sideways ever since. The rally was of course

driven by the creation of the Pandemic Emergency Purchase Programme that was

announced last night.

- The German IFO preliminary data was released and the expectations component

fell to a level lower than seen in the eurozone sovereign crisis with lower

levels only seen on two prints during the financial crisis. Take-up of the ECB's

TLTRO III operations will be closely watched at 10:30GMT. There was little

market reaction to the release of the data.

- Bund futures are down -0.44 today at 168.35 with 10y Bund yields up 4.1bp at

-0.199% and Schatz yields up 10.3bp at -0.676%.

- BTP futures are up 5.27 today at 137.13 with 10y yields down -60.4bp at 1.824%

and 2y yields down -74.9bp at 0.744%.

- OAT futures are up 1.73 today at 163.53 with 10y yields down -11.8bp at 0.224%

and 2y yields up 7.6bp at -0.424%.

- 10y spread changes: BTP -71bp, GGB -139bp, Portugal/Spain -40bp