It was an eventful afternoon for the....>

EGB SUMMARY: It was an eventful afternoon for the EGBs with the Bund spent most

of the day in rally mode. The 10Y Dec-17 Bund contract reached an intra-day high

of 162.25 and is well bid at the moment at 162.30 on news that the Catalan

Parliament takes steps towards independence and Jay Powell is favoured by Trump.

This appears to be largely a risk-off trade as the Yen and gold both gained on

the day as well. The 5-10Y part of the German yield curve has steepened and the

10-30Y part of the curve has flattened. 

- The first big news of the day was that Catalan Parliament moved forward with

the implementation of the declaration of independence and this was followed by

an announcement that the Spanish Central Government had given PM Rajoy the

permission to go forward with direct rule over the Catalan region. There was a

steady rise on the Bund-Bonos spread in the early part of the London trading

session, but as news started to trickle in about the events surrounding

Catalonia the spread widened rapidly and reached its widest at 120.9bp on the

day and is currently trading at 118.6bp.

- In terms of flows, the most popular trade was the 2-5Y EUR swap flattener.