EGB markets are slipping at the open....>

EGB SUMMARY: EGB markets are slipping at the open of European trading. 

- The tax-plan inspired equity rally faded in the US and the S&P 500 actually

closed 0.1% lower on the day.

- Overnight, the 10Y Treasury dropped around 1bp and then reversed by roughly

the same amount, thus providing few clues for EGBs at the open.

- Currently, the 10Y Bund yield is unchanged at 0.344% but there is a marginally

better bid at the front end of the yield curve and more so at the front end of

the Spanish and Italian curves.

- Greek debt is on fire with the 10Y spread 40bp tighter to a 3 year low of

465bp upon news a staff level agreement with Greece has been reached and the

final disbursement decision might come at the 22 January Eurogroup meeting.

- Eonia is interesting once again with the index closing at -0.319%, which is

4bp above where it has largely traded since June. Surprisingly, the 2Y Eonia

swap is showing little impact from the greater permanency of the spike seen at

the end of last month.

- The 3m EURUSD cross currency basis swap is back to -49.25bp, an 11-month low.