The 10Y German Bund yield is............>

EGB SUMMARY: The 10Y German Bund yield is currently trading 0.367%, which is

0.5bp lower. The Dec-17 Bund contract rallied in the morning continuing a move

that began last Friday on reports that the ECB was honing in upon a nine month

extension of QE. However, the contract gave back some of its gains in the

afternoon mostly in response to a large 5Y US block trade and decent paying in

the EUR swap market.

- The 10Y Bund-Bonos spread is currently trading 1.7bp tighter at 119.2bp,

carried by a strong BTP performance.

- ABI reported that Italian banks volume of net bad loans dropped another

E0.5bln to E65.3bln in August, part of a long running story of clearing up of

banking risks. 

- Looking forward, Wednesday sees a E1bln 30Y auction and a E6.2bln Irish

redemption. The market is on the look out for a possible 20Y BTP syndication

announcement following a Reuters report from last week that this is being

studied. So far, SSA issuance has been reasonably healthy this week but with a

lot of issuers heading to the short end of the US.