EGBs initially responded to the.........>

EGB SUMMARY: EGBs initially responded to the strength in US equities, which led

to a small dip for the Bund contract at the open of trade. Most of the day was

spent in fear of what equities might do.

- Peripheral debt saw firm bid until late in the session and mostly in the

carry/roll-centric 3-5Y maturities.

- Spanish CPI/HICP data surprised to the downside at 0800BST and provided a bid

to the Schatz that quickly spread up the curve.

- A new thirty year high in the 10Y Bund-Tsy spread of 233bp was achieved. The

benchmark Germany Bund Feb-28 saw its lowest yield since it was first sold in

January.

- Economic data included fairly weak M3 data (including components) and a larger

than expected dip in Eurozone economic confidence from 114.2 to 112.6 in March.

- The afternoon session was stylised by mostly flow-linked surges and declines

in core bonds. 

- Heading into the close, the 2Y Schatz is -0.6bp at -0.61%, 10Y -1.7bp at

0.507% and 10Y Bund-BTP -1.7bp at 137bp.