Bonds have been under pressure across...>

EGB SUMMARY: Bonds have been under pressure across the planet in the past 24

hours. EGBs were under heavy supply pressure yesterday and their small tug on

the UST market saw a fairly brutal push above 2.50% and beyond. JGBs also

weakened in overnight trade despite a so-so auction.

- There is  a subtle risk-off movement as equities and the yen responded via

normal correlations to the movement in USTs. 

- Overnight, there was big seller in the TY contract from around 0400GMT and the

strongly prevalent trade in the swap market is the flattener. It can be added

that these flatteners are new trades, judging by their expiry dates.

- The supply threat is obvious today in the European markets with EUR5bln of the

new 10Y Bund alongside what are likely to be three large syndicated deals from

EFSF (7Y), Portugal (10Y) and Italy (20Y) although the last two have yet to

formally open books. 

- French industrial production fell 0.5%M/M in November, in line with consensus

and this is the only data release of note on either side of the Atlantic today. 

- The Bund 10Y yld is 0.9bp higher at 0.473%; 10Y Bund-BTP is 1bp tighter.