Low volumes but fairly large moves on...>

EGB SUMMARY: Low volumes but fairly large moves on Monday. 

- For almost the entire day, German bonds moved steadily lower and going into

the close the yield curve is bear steepening with the 10Y Bund + 3.1bp at

0.736%. Less steady was the sudden selling surges in the periphery. For the most

part, this was concentrated upon the long end of the Italian curve.

- Investors are less wedded to their Italian bond positions as it is only just

over 2 weeks before the elections and the situation is fluid. The 30Y led the

widening of spreads to the core on Monday but even the Bund-BTP 10Y spread

widened 4bp to 131.7bp.

- Some of the widening was Italian led but German debt was in demand generally.

On Tuesday, hopes are that the SPD's 464k members will endorse the coalition

agreement (it's an all day ballot).

- Spain announced that it would sell a 2048 security in the near future.

Usually, this means from tomorrow, although Asian holidays may have a say.

- Slovakia sold E160mln of 15Y and 30Y debt via auction.