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Decent SONIA Action Tuesday


Larger FX Option Pipeline


Profit Taking In 2EZ Put Spread

EGBS: EGBs are trading mixed with core/semi-core slightly lower, but periphery
are modestly higher as M5S and Lega request more time to form a coalition as
difference remain. German 10-yr Bund yield is 1bp higher at 0.621% with yield
curve slightly steeper.
- Bunds are seen underpinned though by softer than expected German preliminary
Q1 GDP which came in at 0.3% q/q vs expectations of 0.41% q/q. Attention is now
turning to flash Eurozone Q1 GDP at 0900GMT and at the same time German ZEW
survey for May is released.
- Less certainty of a Italian coalition government being formed by M5S and Lega
has supported a bid in BTPs so far this morning with 10-yr Bund/BTP spread 2.8bp
tighter at 128.9bps. The good sentiment has also supported move higher in Spain
and Portugal.
- Euribor strip is mixed with curve steeper as white contracts are steady to 0.5
tick higher, while blues are 0.5 to 1.5 ticks lower.