EGBs have performed strongly............>

EGB SUMMARY: EGBs have performed strongly throughout the day, with the exception

of some pre-weekend profit-taking in the past half an hour. 

- There is a preference for German debt today in the EGB space and the 10-Year

Bund yield has outperformed the Italian/Spanish/Portuguese triumvirate by around

1-2bp. The swap curve is also underperforming Germany. 

- Bund futures volumes are approximately in line with the 10 day average. 

- One notable trade this morning was a 24.5k DUU7 vs 8.2k OEU7 flattener trade

that went through mid-morning. As a result, there has been a decent flattening

between the CTDs into the respective contracts.

- German PPI data rose by a better-then-expected 2.3%Y/Y but otherwise, data has

been thin on the ground.

- The upside for the Bund is also seen as limited by a technical quagmire in the

Treasury note future that sits between current levels at 127-00.

- Currently, the Bund yield sits 1.3bp lower on Friday at 0.412%, with the curve

flatter by around 1bp.