Striking a relatively optimistic note...>

EGB SUMMARY: Striking a relatively optimistic note ECB Governing Council Member

Ardo Hansson has argued that the euro area economy is progressing broadly in

line with the official forecast and stated "for every bit of bad news, you get a

bit of better news".

- German bunds have traded sideways for most of the day with the curve a touch

flatter. Current yield levels: 2-year -0.584%, 10-year 0.229%, 30-year 0.871%.

- The French OAT curve has steepened since mid morning with 2s10s currently

trading at 116.4bps up from 115.4bps. The 3-year benchmark has underperformed on

the day with the yield up 1.2bps from yesterday.

- Italian BTPs have sold off this afternoon having lacked direction during the

morning session. Yields are up are 5-7bps across the curve. The sell-off

extended following the announcement of a planned syndicated 15-year note.

- The Spanish curve has steepened sharply from midday, driven by the longer-end

selling off. The 2s10s spread has pushed up to 171.2bps from 166.3bps.

- Euribor futures are down 0.5-3.5 ticks lower with greens/blues

underperforming.