EGB markets started lower and never.....>

EGB SUMMARY: EGB markets started lower and never recovered; it has been a slow

grind lower all through the morning session as heavy supply appears to be taking

its toll. 

- Aside from supply, it appears that last week's bull run is starting to unwind.

The Dec-17 Bund contract open interest ramped up extremely fast last week and is

the highest since late June.

- On Tuesday morning, the biggest downturn on the curve is reserved for the RXZ7

CTD contract.

- UK CPI data printed firmer than expected and a generally decent risk-on tone

has also helped push EGBs lower today.

- The Austrian 5Y and 100Y syndicated deals appear to be going strongly, with

guidance having been tightened twice already. 

- The same cannot be said for the 30Y Bund linker that only just saw bids

sufficient to beat the E0.5bln amount on sale. 

- Finally, the Netherlands sold E2.2bln of 10Y paper, on the low side of the

2-3bln target range.