EGBs have opened on the soft side, yield.......>

EGBS: EGBs have opened on the soft side, yield curve modestly flatter, weighed

by the hawkish tilt of the FOMC statement released last night and as markets eye

key ECB monetary policy decision this afternoon. German 10-yr yield is 0.2bp

higher at 0.484%, with 2s/30s 0.7bp tighter.

- Fed raised rates by 25bps and the IOER by 20bps as wildly expected, however,

the front end of the dot plots was moved higher with 4 rate hikes in total for

2018 and 3 for 2019, while the longer end remained steady. There were a number

of alterations to the Fed's opening statement as well, which appeared on the

hawkish side of the scale.

- EMU Periphery are modestly underperforming Bunds with 10-yr Bund/BTP spread

3bp wider at 235.5bps as markets turn their attention to key ECB decision and

press conference later today.

- ECB is expected to leave rates and QE unchanged, but the GC is likely to have

discussed options on its QE programme which is due to end in September, but no

concreate announcement is expected today. ECB will also release latest staff

macro-economic forecasts for growth and inflation.