An eventful morning with a North........>

EGB SUMMARY: An eventful morning with a North Korean missile, a terror incident

on the London Underground (thankfully no fatalities) and a couple of central

bank speeches that moved the needle.

- The reaction to the Korean missile was not significant as it seems the market

has become immune to such incidents. However, Bunds spiked on the news of an

explosion on a London underground but the big move of the day was linked to a

speech by a dove on the Bank of England, Vlieghe who appeared to endorse a near

term rate hike and later was quoted as saying that a tightening of monetary

policy might need to rise more than once if the economy develops as expected.

- Gilt yields are 7-10bp higher today. However, the ECB's Lautenschlaeger from

the Bundesbank also put in a hawkish speech soon after Vlieghe and the Bund was

punished further, even if a hawkish speech by Lautenschlaeger is not so unusual.

- The rise in EGB yields has been led by the belly, with the Obl +3.2bp, the

Bund is only 2.4bp higher at 0.437%. Peripherals are outperforming.

- France announced the bonds and sizes for next Thursday's auction and Belgium

gave the size for their auction on Monday. There was no important data.