Bunds continue to trade on the..........>

EGB SUMMARY: Bunds continue to trade on the movements of the 10-yr Tsy Note

yield fluctuating around the 3% level and are currently marginally lower with

German 10-yr yield 1.1bp higher at 0.642%. Curve is slightly flatter as 2-yr

remains anchored.

- French consumer confidence edged higher in April but that is pretty much it

for Eurozone data today, so attention likely to remain on the swings in US

Treasuries and how far it it likely to push above 3.00%.

- Both Barclays and BNP Paribas have put out notes saying how they see a

extended sell-off in Bunds in the near term being unlikely, especially ahead of

ECB meeting tomorrow, but further out should see pressure build. Both also see

attractiveness of a 10s/30s flattener in OATs.

- Markets not expecting much from the ECB Thursday with Draghi seen preparing

them for possible changes in forward guidance and or announcement on future

course of QE in June or even July. Attention appears to be on the ECBs take on

latest economic data which has come in on the soft side.