Bunds opened stronger on Monday, in.....>

EGB SUMMARY: Bunds opened stronger on Monday, in response to the North Korean

hydrogen bomb test. However, movements were fairly modest thereafter as the US

holiday severely hampered global liquidity. 

- Naturally, there was heavy roll activity with the last trade scheduled for

Thursday.

- Peripheral debt performed strongly, particularly in the morning session as the

weekend produced more moderate language from a senior M5S politician. The

Bund-BTP spread tightened by 2.1bp to 168bp but the Spanish market performed

stronger still, tightening 3bp to 119bp. 

- The ECB provided details of their asset purchase programme in the afternoon.

Highlights included a big drop in German buying but decent resilience in terms

of amount purchased and marginal duration from for French bonds. Given the

increased slope between 5-30Y OATs compared to 5-30Y Germany, the data did not

back up movements in the market. EGBs did not move immediately and 30Y France

was already the poorest performing sector of the curve.