German Bunds have given up majority.....>

EGB SUMMARY: German Bunds have given up majority of its earlier gains, likely

weighed by EGB bond supply from Italy, Germany and Finland, as impact of soft

German IFO fades. German 10-yr yield last 0.8bp lower at 0.628% with the curve

flatter as 2-yr space is under pressure from Schatz re-opening auction. German

2s/10s is 0.8bp tighter.

- 2-yr Schatz yield is 0.7bp higher at -0.549% despite strong demand seen at the

re-opening auction

- German IFO business climate indicator slipped to 102.1 in April from 103.3 in

March, more than the fall to 102.7 expected by analysts. While the current

conditions and expectations component dropped to 105.7 from 106.6 and 98.7 from

100.0 respectively. IFO talked about the German economy "slowing down" as "high

spirits among German businesses have evaporated".

- EMU periphery bonds are closing the opening gap to Bunds now that supply is

out of the way. 10-yr Bund/Bonos spread 0.6bp wider at 68.2bps vs high of

69.8bps, while Bund/PGB spread is now 106.5bps vs 109.3bps seen this morning.

- Italy sold max E3.75bln in CTZ and BTPei's and Finland E1bln 10-yrs