EGBs have opened on the back foot slight.......>

EGBS: EGBs have opened on the back foot slight with the exception of the very

short-end of the curve which is either steady or slightly higher, as markets

digest FOMC statement last night. This has led European yield curves to modestly

steepen with markets eyeing key Eurozone flash April inflation and bond supply

from Spain and France. German 10-yr yield is 0.9bp higher at 0.59%.

- The Euro Area 'Flash' Inflation estimate release at 0900GMT is pencilled in by

analysts to rise slightly, with the HICP y/y forecasted at 1.4% for April

compared to March's 1.3%. However, there is likely to be some downside risk in

this estimate resulting from fairly weak inflation data in France, Germany,

Spain and Italy.

- Long-end of France is coming under some mild pressure this morning as AFT taps

that part of the curve for up to E8.5bln. While Spain looks to issue up to

E4.5bln in 3-yr, 10-yr and 50-yr Bonos.

- Front end of Euribor strip has seen some early selling with white and red

contracts steady to 1 tick lower, but green and blues remain steady.