The Bund yield opened around 1.5bp......>

EGB SUMMARY: The Bund yield opened around 1.5bp lower at 0.435% and it has

approximately stuck there though the session. Currently it sits at 0.44%

- Weekend political news in Spain/Italy failed to hurt Spanish or Italian debt

on Monday. This morning Catalonia announced that it would hold a Parliamentary

session on Thursday, one day ahead of the Central government Senate decision on

Art. 155.

- There have been some strong flows in the periphery with several hundreds of

millions of buying reported mid-morning. However, this could have been hedging

of a Bund-BTP block trade that showed up in the futures market (2,543 IKZ7 @

137.08 vs 2,148 RXZ7 @ 161.55 at 1004BST). In a brief period around this flow,

the Bund-BTP spread ratcheted in from 160bp to 156bp.

- Belgium conducted a 6Y, 9Y and 30Y auction that met with solid, if not

exceptional demand. The 6Y appeared strongest.

- Much talk of the massive French redemptions/coupon on Wednesday. At least

today, there is no obvious impact upon short-maturity OATs.