Core/Semi-core bonds have been..........>

EGB SUMMARY: Core/Semi-core bonds have been slowing recovering from opening

losses and are currently trading mixed with yield curves steeper as long-end

remains in negative territory. German 10-yr yield is 0.7bp higher at 0.579% and

2s/30s 1.6bp steeper.

- Overnight rise in US Tsy yields weighed on opening of EGB, however, flows have

been light and with little seen during morning session to direct markets yields

gradually pared losses with next weeks ECB monetary policy meeting eyed.

- Bloomberg released a survey of economists ECB expectations though which showed

they have brought forward estimate of QE end date and see first change in

forward guidance in March. 

- The only data from the Eurozone today was ECB current account data which

showed a small increase in November to E32.5bln.

- EMU Periphery have sharply outperformed core/semi-core with Spain and Portugal

leading the charge with 10-yr spreads circa 4.4bp tighter vs German Bund.

Markets highlight possible Spain rating upgrade by Fitch tonight and also an

outside chance that S&P upgrade Greece as well for the positive sentiment.