Bunds started well despite the equity...>

EGB SUMMARY: Bunds started well despite the equity market showing a small skip

in its step, once again demonstrating that the correlations between asset

classes are somewhat broken. After a mauling in the past few days on talk of a

new 30Y Spanish syndicated deal, the peripheral markets are staging a small

pull-back and the 10Y Bund-BTP, Bund-Bonos, and Bund-PGB spreads has each

narrowed by 1.5bp. Interestingly, 30Y peripheral markets are not performing

quite as strongly.

- Along the curve, there is a generalised outperformance by the 10Y sector of

almost all EGB markets. The 2Y Schatz is flat, at -0.572%, the 10Y Bund -1.9bp

at 0.731% and the 30Y is -1.4bp at 1.368%.

- German Q4 GDP printed in line with expectations at 0.6%Q/Q and the final

German HICP matched the flash release at 1.4%Y/Y. 

- Later today, German sells E1.5bln of an off-the-run Bund 2044 and at the same

time Portugal sells 4Y and 10Y debt.