Bunds have continued to drift lower,....>

EGB SUMMARY: Bunds have continued to drift lower, with the only scenario making

sense today, to explain the price, was some profit taking post the large Month

End from last Thursday.

-With European market closed last Friday, investors came back today, and selling

was favoured throughout the day session. -EU Macro economics are still a major

concerns, so pullbacks are seen as more corrective. 

-Peripheral spread started with Italy widening couple of basis point of the

open, but we have since tightened somewhat and trading 2.4bps tighter on the

day. 

- ALL EYES now on tomorrow, and the German Constitutional court expected to

offer a ruling on the ECB's Public Sector Purchase Programme (PSPP) and its

legality in relation to German law at around 1000CET (0900BST, 0400ET). It is

unclear whether the court will also issue a ruling on the ECB's Pandemic

Emergency Purchase Programme (PEPP). A ruling against QE could leave the ECB's

response to the COVID-19 economic crisis in disarray.