EGBs opened lower with the Bund.........>

EGB SUMMARY: EGBs opened lower with the Bund contract losing 27 ticks and was

almost entirely a reaction to the hawkish sounding Fed Minutes released after

the European close yesterday.

- EGBs are currently in the process of recovering from the weak open and the

2-10Y German curve has bull flattened in the first hour of trade, narrowing from

128bp to 126bp.

- Greek debt is making a very modest outperformance following its two notch

upgrade from Caa2 to B3, outlook positive. It follows a similar two notch

upgrade by Fitch last Friday. The GGB 10Y is currently 3.5bp lower at 4.41%.

- Italian and Spanish debt markets are underperforming Germany by around 1bp at

10 and 30Y sectors although there is no substantive news today that justifies

the widening.

- There are no EGB auctions today but there is an outside chance that Belgium

sells a 15/20Y Green bond. However, it would be unusual for a sovereign to begin

a syndicated deal so late in the week.

- Main event will be the ECB account of the January policy meeting at 1230GMT