It is a deafening sound of silence in...>

EGB SUMMARY: It is a deafening sound of silence in the EGB market this morning.

Dec-17 Bunds weakened at the open, playing catch-up with the slide in late US

trading but the contract has settled into a tight range around 162.29.

- Relative to the European close, EGB curves are bear steepening from the very

long end, perhaps weighed by heavy and longer maturity supply from France and

Spain later this morning.

- Also, the market is suffering under the weight of the ECB's proximity. Around

80% of banks believe a QE announcement is due in October's with the remainder

seeing a decent chance of it happening today. Most see some kind of hint that a

taper is coming next month.

- In terms of positioning, yesterday saw considerable amounts of downside option

trades put on. Also, the Dec-17 Schatz contract underperformed swaps

considerably yesterday, which is also an 'early-taper' trade. This morning is

seeing the 2Y area of German better bid against the OIS and libor swap curves.

- On the data front, Eurozone final Q2 GDP is released at 0900GMT but Draghi's

press conference makes data redundant today.