the Brexit Breakthrough dropped EGB.....>

EGB SUMMARY: the Brexit Breakthrough dropped EGB prices from the get-go. The

very long end of core curves is suffering greatest and the 30Y Bund yield is

3.0bp higher at 1.16%. However, anything in EGBs pales in comparison to the

4-6bp upward move in the Gilt yield curve.

- Peripheral market spreads to the core are tighter (yawn...again). The 10Y

Bund-BTP leads with a 2bp tightening to 136.6bp and compares to the 14 month low

of 136.2bp.

- Ahead of US non farm payrolls later today, there are few hopes for a

predictable and large move in the markets. Above the market, 163.88 is the daily

bull channel top (off Sept low) and on the low side 162.29 is the daily bull

channel base (off Oct 25 low). Admittedly, this is a wide range between these

important levels but with Brexit breakthroughs and payrolls in fairly thin

markets, anything is possible. Contract is now at 163.31.

- There no supply today but at 1000GMT, the French AFT is expected to

communicate the sizes and bonds for its auction scheduled for next Thursday.

- The 2Y Schatz yield is 0.4bp higher at -0.755% and 10Y Bund +2.0bp at 0.313%.