It was a game of two halves with the...........>

EGBS: It was a game of two halves with the post-FOMC yield rise continuing in

core Eurozone bonds until around 11am London time and just after the heavy

auction schedule.

- French auctions went fairly well, Spanish auctions were slightly weak but not

outlandishly so. 

- As US traders hit desks, there were apparently some flows out of the US into

the Bund. The Bund outperformed strongly and markets were then hit by a flurry

of headlines linked to Trump announcing a new approach to North Korea. There

ensured a fairly decent rush to buy German debt on the back of these rather

vague headlines.

- Peripheral markets were generally wider. Some put this down to  the Catalonian

issues but the Spanish market was weak but not as weak as BTPs. The 10Y Bund-BTP

spread was 3bp wider at 165bp.