EGBs opened higher as global asset......>

EGB SUMMARY: EGBs opened higher as global asset markets responded in a risk-off

way to the renewed threat of a trade war. The strong performance continued until

US markets opened and with a few Treasury market bearish option trades pulling

US markets lower, Europe followed.

- Peripheral spreads are seemingly unfazed by the threat of Italian elections of

SPD vote results at the weekend. Indeed, the carry/roll-centric 5-7Y section of

the Italian curve was the best performing sector of the major curves, declining

by around 3.5-4.0bp.

- Greek debt also performed strongly, with the 10Y down 10bp on the day as news

hit that the ESM is very likely to endorse paying the 4th tranche of the Greek

bailout money. 

- The always volatile German retail sales data printed weak in January at

2.3%Y/Y but data had no significant impact upon European rates trading today.

- Futures roll activity has been extremely elevated, particularly in the Schatz.

However, Bund rolls look to be a laggard.

- German 10Y is -1.8bp at 0.626%. Bund-BTP is -2bp at 128bp.