If yesterday was presented as a bad.....>

EGB SUMMARY: If yesterday was presented as a bad trading day for the EGB markets

today has been the opposite. The Mar-18 10Y Bund contract opened lower, however,

the market made a U-turn and price spiked higher. The yield on the 10Y Bund is

currently trading 3.1bp lower at 0.436% with curve flatter.

- The late morning spike in Bunds could possibly be as a result of light

volumes, but also swapped issuance that is going around as reported by traders.

There were some large Bund future blocks reported earlier, which could also be a

source for the rally.

- There was also a WNH8/UBH8 future block spread go through, which appeared

selling the former and buying the latter. The spread between 30-yr US TSY and

30-yr German Bund has widened by over 7bp in the last 2-days to 153bps. 

- There is very strong demand for the new Irish 10Y syndicated bond with books

in excess of E14bln being reported. The Bund-Irish spread is 2.7bp tighter at

22.8bp.

- Surprisingly peripheral markets have outperformed core markets despite

upcoming supply, with Bund-BTP 2.5bp tighter.