Despite announcing an end to the........>

EGB SUMMARY: Despite announcing an end to the asset purchase programme, the ECBs

cautious commentary and commitment to keep policy rates low until at least

through the summer of 2019 has resulted in a net-dovish response from the market

with money market futures and EGB curves broadly flattening.

- Bunds rallied sharply on the news with the benchmark 10-year bund yield

falling to 0.425% from an intraday high of 0.508%. Outperformance at the long

end has caused the curve to flatten, with the 2s10s spread down to 105bps from a

high of 108bp on the day. 

- French OATs similarly rallied and the curve flattened with the benchmark

10-year yield falling to 0.763% from a daily high of 0.868%. 

- The movement in BTPs has been more aggressive, with the 2-year yield falling

to 0.791% from 1.043% just before the ECB announcement. Unlike bunds, the BTP

curve has steepened with the 2s10s reaching 196bp from 188bps at the open.

- The EURIBOR futures strip has flattened with Reds through to Blues trading up

3.5-5.5 ticks.