Bunds are dragging themselves up off....>

EGB SUMMARY: Bunds are dragging themselves up off the floor this morning as EGBs

overcome supply and no doubt some of tomorrow's massive redemptions are

beginning to get reinvested.

- One ongoing theme is Catalan independence, which has led to quite considerable

underperformance of Spanish debt in recent weeks and is featuring again this

morning. The 10-Year Spanish spread to Germany is 3bp wider and its

underperformance has also begun to pull the BTP market lower.

- The German 10Y yield is lower by around 0.3bp but the better demand is in the

5Y section of the curve.

- Interest in linker markets has increased and spreads between European and

French breakeven curves is moving after newspaper leaks on Tuesday picked up

that the French Livret A rate might remain stable for 2 years. 

- Ireland successfully sold debt and the conclusion of the auction prompted an

instant 0.75bp contraction in the 10Y Bund-Irish spread.

- Looking ahead, the Bank of England decision is at noon London time and policy

makers and Eurogroup politicians are gathering in Estonia for a meeting.