EGB yields were slowly and steadily.....>

EGB SUMMARY: EGB yields were slowly and steadily driven downwards in early

European trade. Initially, there was quite a good bid to the periphery, as has

become common place lately but that buying faded early on. 

- Heading into the close, there has been a very subtle steepening of the German

yield curve and the 10Y Bund yield is 1.6bp lower at 0.329%. The Bund-BTP spread

is 0.5bp wider at 138bp, although Spanish bonds are heavier.

- On the supply front, Austria announced that it would cancel its Dec 12

auction, as expected. By contrast, Portugal unexpectedly said it would undertake

a debt exchange tomorrow.

- Datawise, the final reading of the Eurozone Markit PMI indicator was unchanged

to the prelim although the text accompanying the release did talk up cost

pressures. However, the EGB reaction was fairly muted.

- Eurozone retail sales data weakened in October by more than expected to

0.4%Y/Y from an upwardly revised 4.0%Y/Y.

-Eurex calendar roll activity was elevated with the last trade for the Z7 on

Thursday. There was also considerable attention on Brexit negotiations.