German fixed income futures also fell afoul...>

BUNDS: German fixed income futures also fell afoul of the broader risk on flows

overnight. Schatz -2.5 ticks, Bobls -11.0 ticks & Bunds -38 ticks.

- BBG summarised a Handelsblatt interview with ECB's Knot, released over the

weekend. BBG noted Knot stated that "the European Central Bank would need a

clear monetary-policy reason to consider acting to mitigate the effects of

negative interest rates on banks." Knot added "I must also be convinced that

tiering is the best way to solve that. I have my doubts on both points. In any

case, the effect on banks could be very diverse depending on their size and

business model." This is Interesting. Knot had suggested that the ECB should

stay WELL AWAY from deposit rate tiering earlier last week. The latest comments

sound much more in line with Praet's recent comments on the matter. Also, Knot

suggested that the ECB will likely disclose TLTRO details in June or July. Knot

expects the Eurozone economy to avoid recession.