EGBs have opened on the back foot, sliding.....>

EGBS: EGBs have opened on the back foot, sliding lower as markets continue to be

weighed by yesterday's hawkish rhetoric from ECB members and risk-on tone,

despite another set of disappointing factory orders from Germany. German 10-yr

Bund yield is 4.1bp higher at 0.506% with yield curve sharply steeper as

short-end remains anchored.

- Source report heavy selling at start of European session in both German Bunds

and US Treasury Notes with around 25k RXU8 sold between 159.65/159.50 and 12k

TYU8 from 119-085/07

- EMU Periphery are lower as well but are fairing slightly better than

core/semi-core EGBs. 10-yr Bund/BTP spread is 5.9bp tighter at 241.5bps and

Bund/Bonos spread 4.5bp tighter at 99.2bps.

- German factory orders slipped for the fourth consecutive month in April, but

markets not reacting as they concentrate on possible ECB announcement on QE next

week.

- Eurozone final Q1 GDP data released at 0900GMT and Spain and French bond

auctions are the main events this morning