Futures volumes were fairly slim on.....>

EGB SUMMARY: Futures volumes were fairly slim on Monday and movements in the

core and semi-core markets were fairly limited. the 10Y Bund yield rose by 1bp

to 0.577%. That combined with a small decline in the 10Y UST yield meant that

the 10Y Bund-Treasury spread moved back from the recently peak of 210bp, a

higher that has now occurred four times in the past six weeks.

- The impact of the weekend German SPD vote to take part in Grand Coalition was

initially to take Bunds up 10 cents or so, before the semi-core (particularly

France) ran into some selling in the longer end of the curve. 

- The main movement was reserved for the periphery, resulting from the upgrade

of Spain's rating by Fitch. Heading into the close, the 10Y Bund-Bonos spread

was down 3.8bp to 83.6bp despite the (much-awaited) announcement of a 10Y

Spanish mandate.

- Greece was upgraded by S&P but the impact on the debt market was small as the

Eurogroup discussing the state of Greek finances later this evening, hopefully

unlocking the final E7bln loan.