EGBs have suffered alongside US.........>

EGB SUMMARY: EGBs have suffered alongside US Treasuries and global bond markets

as the threat from the Korean peninsular subsides. Bunds are also suffering from

a lack of liquidity as many trading centres are on holiday because of Assumption

Day.

- Italian BTPs have come under particular attention in the past hour and the 15Y

BTP is currently 5.5bp higher alongside the Bund-BTP 10Y spread widening 1bp to

162.7bp.

- There has been no economic data and no bill or bond supply. 

- The German Constitutional Court referred a decision on the legality of the

ECB's QE programme to the ECJ although the limited lifespan of the QE programme

means that by the time the ECJ considers the case, there will not be much QE

that needs doing. However, the report said there were questions of whether PSPP

is compatible with the ban on monetary budget financing.

- The Bund yield is currently 3.5bp higher at 0.44%.