Bunds ticked lower in early trade this........>

BUNDS: Bunds ticked lower in early trade this week, aided by the strong Japanese

GDP print and hover just above worst levels as we approach European hours;

Schatz -0.5 tick, Bobls -5.0 ticks, Bunds -12 ticks. Friday saw the periphery

ex-Italy tighten, with Italian fiscal worry still front & centre. Bund yields

closed at -0.104%. Worth highlighting a Corriere interview with ECB's Knot,

published Sunday. Knot noted that the current inflationary situation is "not

full convergence to below but close to 2%, I think... We have a figure in mind

that is clearly closer to 2% than the number we have seen over the last 5, 6

years or so. The only thing that we can do is to keep the pressure up, to make

sure the economy continues to perform at high levels of capacity utilization and

the economy continues to print GDP numbers in excess of potential growth... At

some point this chain of events will also lead to higher prices."

- In terms of domestic matters it would seem that the CDU party leader AKK

attempted to persuade German Cllr Merkel to leave her role after the upcoming

European elex, although this seems to have failed & she is now having to defend

herself re: the matter. Comments from ECB's Praet headline the docket today.