Bunds have opened smartly and the.......>

EGB SUMMARY: Bunds have opened smartly and the contract is already trading above

the high from Thursday. The spike higher in eonia to -0.241% (6bp higher than

yesterday) is holding the front end of the curve back a little.

- The eonia spike is clearly caused by month-end yesterday but adds to the

largely unexplained 6bp jump from the day before. The movement is so large as to

compare to the big year end spike in 2016. 

- The Bund 10Y yield is 0.8bp lower at 0.359% and the 30Y is moving slightly

more rapidly. 

- There has been some modest-sized real money selling in the long end of the

peripheral markets this morning and so 10Y spreads to Germany are 1-2bp wider.

- Breakevens are still well bid as the OPEC agreement dominates the inflation

debate. The 5Y5Y forward inflation swap is back to 1.702%, the highest since

March.

- Today, the Nov Manufacturing PMI data will lead the early price action.

Spanish data improved from October to 56.1 from 55.8, although a little below

expectations. The US Senate tax reform vote is clearly the big event on Friday.