EGBs have edged higher and yield........>

EGB SUMMARY: EGBs have edged higher and yield curves have flattened slightly in

a quiet Monday trade, supported by poor German factory orders and afternoon

rally in US Treasuries. What trading there has been has mainly been buying in

the long-end end of the curve.

- German 10-yr bund yield is 2bp lower at 0.525% with 2s/10s and 10s/30s 1.9bp

and 0.5bp flatter respectively. 

- A surprise contract in German factory orders saw Bunds tick higher in the

morning. Then in the afternoon Bunds rallied to session highs, tracking rise in

US Tsys with little seen to trigger the move apart from rise in geo-political

tensions in Mid-East as oil extended moves higher.

- ECB released QE data which showed over month of April there was a large

negative deviation from capital key in Bunds & avg maturity jumped to 18.8ys.

- EMU periphery have regained earlier tightening move with 10-yr Bund/BTP spread

now now hitting fresh session lows of 123.2bps, 2bp tighter.

- While Euribor strip is steady to 1.5 ticks higher, curve flatter as green and

blue contracts outperform.