German Bunds look set to close mixed....>

EGB SUMMARY: German Bunds look set to close mixed after the short-end recovers

in European afternoon session but the long-end remains in negative territory and

in-turn steepening the yield curve. German 10-yr yield is 1.4bp higher at 0.576%

and 2s/30s is 3.4bp steeper.

- The long-end appeared weighed by EGB supply and the thinking that the ECB will

not change its forward guidance and push back against the latest hawkish take on

the December ECB minutes at next weeks GC meeting.

- Spain sold a combined total of E4.093bln in 5-yr, 15-yr and 30-yr Bonos,

France got away E7.497bln 3-yr, 5-yr and 6-yr OATs, while Austria launched a new

E4bln 10-yr RAGB via syndication.

- Risk-on sentiment and solid Spanish Bono auction has led EMU periphery to

outperform Bunds with 10-yr Bund/BTP 3.2bp tighter and Spain and Portugal not

far behind at 3bp tighter.

- Comments from ECB Weidmann and Coeure did not touch on current ECB monetary

policy, however Weidmann did warn against increase capital spending in Germany