EGBs followed a decent overnight........>

EGB SUMMARY: EGBs followed a decent overnight rally in USTs and the Bund

contract opened 15 ticks higher at 157.62 and this is roughly where the Bund

future sits now. 

- The Treasury rally came after a strong 30Y Bond auction that closed the US

issuance for the week and Tillerson's Rexit. However, there was no accompanying

weakness in US equities that helped the gradual overnight rise in USTs.

- There is a bull flattening of the core EGB curves today. The Germany 2Y is

unchanged, 10Y down 1.0bp at 0.61% and 30Y down 1.3bp.

- Peripheral spreads are stable. Attention will be focussed on Portugal where

the spread to Germany sits atop to 8 year lows ahead of 10Y and 30Y supply

later. Germany also sells E1.5bln of 30Y Bunds.

- The ECB watchers conference takes place in Frankfurt today with a number of

speakers and possibly driving price action.

- Later on, US retail sales and PPI at 1230GMT will be important.

- MNI calculations show that long positions have become quite elevated in the

Bobl and Bund contracts.