Soft regional German CPI and Spanish...>

STIR FUTURES: Soft regional German CPI and Spanish HICP data has set the tone in

Europe this morning, helping both the Euribor and Short Sterling strips to move

higher.

- The front end of the Euribor curve has flattened with Whites flat to 0.5 tick

higher, Reds 0.5-1.5 ticks higher and Greens and Blues 2 ticks higher.

- In the UK, mortgage approvals were a little higher than expected for November,

but this has not been enough to stop the Short Sterling strip creeping higher in

sympathy with Euribor. Again there has been a flattening of the curve in the

White/Red area. Whites are 0.5-1.5 ticks higher, Reds 1.5-2.5 ticks higher while

Greens and Blues are generally 2.5 ticks higher.

- The Eurodollar strip has given up some of yesterday's gains and has bear

steepened today. Whites are flat - 2.5 ticks lower with Reds, Greens and Blues

generally 2.5-4 ticks lower.