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Core and semi-core EGBs are trading.....>

EGB SUMMARY
EGB SUMMARY: Core and semi-core EGBs are trading sharply lower at start of
Wednesday European session seen weighed by overnight weakness seen in US
Treasuries and some stop loss selling in Bund futures. 10-year Bund is 3.4bp
higher at 0.441%, while curve curve is steepening following large 5s/10s
steepener trade going through futures.
- Markets sources reported a large Bobl/Bund future curve trade being blocked at
E1.16mln a basis point,where the account bought 19k Bobls vs selling 8.1k Bunds
- Overnight US Treasuries ticked lower as market reacted to hawkish headlines
from Fed chair Yellen comments but were seen underpinned by comments from US
President Trump that military action against North Korea is a second option.
- European periphery bonds are fairing better with Italy/German 10-year spread
3.3bp tighter at 168bps despite upcoming BTP auctions tomorrow. While comments
from French President Macron's calling for more European ties and closer union
also seen supporting the periphery.
- There is no EGB bond supply today and data is limited to Italy economic
confidence data, so attention likely to be on US data & Fed speakers

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