Core markets got more of a boost from...>

EGB SUMMARY: Core markets got more of a boost from larger than expected drop in

French and German flash PMIs than periphery ones as a slow down in these

countries is likely to have a higher negative impact on the smaller countries.

German 10-yr Bund is 3.3bp lower at 0.702%.

- IHS market though highlighted that average prices charged for goods and

services showed another sharp increase, which could put upward pressure on

inflation the near future.

- French manufacturing PMI slipped further than expected, while it was German

services that saw the biggest decline in sentiment and overall gave a less rosy

picture on the Eurozone economy.

- Spain are also feeling the effects of issuing new 30-yr syndicated Bond for

E6bln yesterday as that part of the yield curve is a clear underperformer today.

10-yr Bund/BTP and Bund/PGB spreads are circa 2bp wider.

- There has been a significant pick-up in Eurex future calendar rolls today with

buying seen in the Bund roll but selling in the Bobl roll going through screens.

- ECB Vasiliauskas said QE should not end abruptly in interview with Reuters.