The day started with an extremely.......>

EGB SUMMARY: The day started with an extremely buoyant peripheral market,

courtesy of a 30bp tightening in the Bund-PGB spread. The move was easily

justified by the Portuguese upgrade to investment grade status by S&P. 

- Also, with such an illiquid market, small buying can have a large effect. BTP

and Bonos markets also benefited but to a much smaller amount. 

- With a generally risk-on feel to markets, core EGB yields rose but what roiled

the Bund contract was a 12,276 RXZ7 block trade in the afternoon. That trade

came at the end of a decent slide of the contract but then pushed the market

down further from 161.07 to 160.88. 

- The US Treasury market was unable to cushion any blow. Being just 2 days

before a possible Fed balance sheet unwind announcement.

- Belgium and Slovakia successfully sold debt. According to the Belgian

Treasury, they have now completed 94% of their annual issuance total.

- Going into the close, the 30Y German yield was 4bp high in a decent bear curve

steepening. The 10Y Bund yield was at 0.464%, its highest level for over a

month.