EGBs/GILTs: European equities are......>

BOND SUMMARY: EGBs/GILTs: European equities are tumbling in the aftermath of the

US travel ban announcement from the Whitehouse, with the risk-off theme driving

down core sovereign yields and underpinning selling at the periphery.

- Bund yields are 5-6bp lower while the curve is relatively flat on the day.

- The French OAT curve has marginally bull flattened with 2s30s 2bp narrower.

Current yield levels: 2-year -0.844%, 5-year -0.614%, 10-year -0.349%, 30-year

0.191%     

- Italy sold E7bln of BTPs this morning. This is the top of the target supply

range and the auctions were well covered. BTP yields are 10-16bp higher for

maturities up to 15 years.

- The combined monetary and fiscal action in the UK yesterday has failed to

arrest the decline in stocks and restore confidence. Gilts are well bid with the

long-end outperforming. Very long end-yields are down 12bp.