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The 30-yr part of core/semi-core EGB....>

EGB SUMMARY
EGB SUMMARY: The 30-yr part of core/semi-core EGB yield curves are
underperforming so far this morning, taking cue from steepening of US Treasury
yield curve overnight as they unwound some of last weeks flattening move. Prices
are off opening lows though with German 10-yr Bund yield now only 0.2bp higher
at 0.311% vs morning high of 0.318%.
- Markets are very subdued though with only 25k Bund contracts seen traded in
the first 75 minutes as market wind down ahead of Christmas and year end breaks.
- Eurozone periphery are enjoying another solid day with Spain and Italy 10-yr
spread to German Bund around 1.7bp and 1bp tighter respectively, continuing to
be supported by mild risk-on flows.
- The main highlight in the Eurozone today will be release of German IFO at
0900GMT. MNI median forecast is for the Business Climate Index to tick higher to
117.6 from 117.5 in December, for Current Assessment to rise to 124.7 from
124.4, but for the Expectations index to drop to 110.7 from 111.0
- Attention will also be on the US with latest housing starts and US tax reform
Bill which is expected to be voted on Wednesday.

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