EGBs rallied strongly, led by the.......>

EGB SUMMARY: EGBs rallied strongly, led by the move higher in German Bunds seen

shortly after ECB press conference where Draghi acknowledged the "moderation" in

Eurozone growth but said it was likely due to temporary factors and did not

change the overall outlook on the Economy.

- German 10-yr Bund yield is currently at 0.594%, 4bp lower on the day, while

the yield curve is flattening sharply as 2-yr remains relatively anchored,

2s/10s is 2.7bp tighter.

- Just before the ECB monetary policy decision, there was a decent curve

flattener trade seen going through future space with 6,567 OEM8 @ 130.69 sold vs

buying 1,362 UBM8 @ 162.64. Sources say this was likely linked to a curve

steepening trade in the US done at a similar time.

- EMU periphery have faired slightly worse than Bunds and the 10-yr Bund/BTP is

1bp wider, but this could be due to upcoming supply scheduled for tomorrow.

Earlier a a source reported continued buying from domestic a/c's in the 3-yr to

1-yr sector of the BTP curve.

- German swap spreads are 1bp wider, while the Euro is on days lows vs US Dollar