Orlando Green at Credit Agricole........>

BUNDS/CURVE: Orlando Green at Credit Agricole commented upon the recent

steepness of the EGB curves. Credit Agricole see more scope for near-term curve

steepening but does not recommend buying the 2Y. He sees the 5Y as the pivotal

part of the yield curve and because it offers decent roll-down and carry.

- Green says that the 2Y is vulnerable because it still trades smartly below the

ECB depo rate of -0.4%; a change in rate hike expectations would quickly take

the Schatz above the depo rate. Credit Agricole see a possibility that his could

occur as soon as the March 8 ECB meeting with fresh ECB Staff forecasts possibly

being the catalyst. However, Green says that an inversion of the depo and Schatz

rate is quite likely by June.

- The possibility of a sudden move higher in the Schatz yield leads Green to

suggest that the 5-30Y combination is preferable for a near-term steepening

trade.