*CORRECTION TO BIG FIGURE. There was....>

EGB SUMMARY: *CORRECTION TO BIG FIGURE. There was a mini moment of alarm in

financial markets this morning as the Hang Seng dropped rapidly in the morning

and the move was mixed up with events in Catalonia.

- The Bund contract leapt higher from 162.04 to peak at 162.56, achieved in the

space of 90 minutes of trading. Within the spike the peripheral markets were

underperforming. Nothing unexpected happened in Spain as the Catalan government

failed to rescind its independence request and the central government

communicated its intention to trigger Art. 155. 

- The Spanish and French auctions went through okay. Indeed, the Spanish

auctions had fairly respectable numbers given the political backdrop. 

- However, what turned markets around was that the early and sudden flush lower

in European equity markets in the morning had U-turned. Participants had

expressed concern that today is the 30Y anniversary of Black Friday and so the

equity market is more important than usual for bonds.

- The 10Y Spanish spread to German has swung around today, starting at 121bp,

peaking at 129bp and currently at 124bp.