Bunds started slightly softer but.......>

EGB SUMMARY: Bunds started slightly softer but have largely carved a small, but

upward, path ever since. However, the stand-out mover is the Spanish debt market

following a slightly surprising one notch upgrade of its rating by Fitch.

- The 10Y Bund-Bonos spread is 5.2bp tighter at 82.3bp. German Bunds are the

weakest within the European debt market space. The Bund-BTP spread is also 3.3bp

tighter as it bathes in the glow of the Spanish upgrade.

- In Germany, the weekend saw SPD delegates vote in favour of formal Grand

Coalition talks. However, the majority was only 56.4% and suggests caution ahead

of the voting SPD members' poll that should occur in March once the formal Grand

Coalition talks have been concluded.

- European stockmarkets are relatively directionless, even the Dax is only +0.1%

after the SPD delegate vote. 

- There is no scheduled EGB bond supply today, although there is a distinct

possibility of either a 10Y Spanish or a Finnish syndicated deal.

- The US/EU data calendar is decidedly thin although company earnings season is

in full swing in the US and the US government shutdown will take centre stage.