Despite the large risk-off flows seen...>

EGB SUMMARY: Despite the large risk-off flows seen in Asia overnight, German

Bunds have opened relatively subdued, potentially weighed by reported comments

that ECB President Draghi gave an upbeat outlook of European Economy to EU

heads. German 10-yr Bund yield is 0.6bp lower at 0.523%

- Overnight saw sharp sell-off in Asian equities worried about trade wars as

China announces it plans to impose tariffs on US imports worth up to $3bln in

response to US tariffs. While the resignation of Lt. Gen. McMaster is also seen

adding to risk-off sentiment. The Yen rallied strongly vs the US Dollar and

dropped below 105 level. 10-yr US Tsy yield dropped to low of 2.7898% but has

since gien up those gains and is now at 2.819%.

- But since the European open there has been a slight unwind of risk-off flows

and European equities opened higher than expected. EGB periphery are holding up

well with 10-yr spreads to German Bunds little changed so far. 

- There is little to get too excited in European session today so market will be

looking ahead to US open and release of durable good data, while EU summit

continues in Brussels.