EGBs lurched lower as New York walked...>

EGB SUMMARY: EGBs lurched lower as New York walked in and equities pared losses,

but have managed to claw back around half of the days losses, as some look to

cover shorts before the weekend. 10-yr Bund yield last little changed at 0.528%

after trading in a range of between 0.517% to 0.547%.

- The European bond markets did not initially appear too concerned about the

sharp sell-off in Asian equities and the prospect of a trade war, as China

slapped $3bln worth of tariffs on US imports was seen as a mild reaction to the

US decision to impose $60bln worth of tariffs.

- News that the EU won a temporary exemption from US steel and aluminium

tariffs, however have until May 1 to agree a more permanent solution, and strong

US durable goods data also weighed on sentiment in the afternoon.

- EGB periphery came under a little selling pressure first thing but have since

recovered with 10-yr Bund/Bonos and Bund/PGB 2bp & 3bp tighter respectively.

Curves are now flatter compared to steepening in core/semi-core bonds.

- Tonight S&P update ratings on Spain and Belgium with markets eyeing an upgrade

for Spain from BBB+ to A-. While DBRS update rating on Austria.