The Dec-17 Bund contract opened a.......>

EGB SUMMARY: The Dec-17 Bund contract opened a little higher this morning, but

lost the early gains soon afterwards. Markets are thin today because of the

German Reformation Day holiday and trading remains choppy as a result of such

conditions. The yield on the 10Y German Bund is 0.8bp lower and is trading at

0.359%

- It is beginning to look like the Catalan independence movement is starting to

falling apart as rumors surface that the former Catalan President Carles

Puigdemont plans to seek Asylum in Brussels. Similar, to yesterday`s trend the

peripheral markets in Spain and Italy are bid today perhaps due to the cash

inflows. There is E16.8bln inflow today from Spain and 15.6bln tomorrow from

Italy. The Bund-Bonos spread is currently at 1bp tighter 111.9bp. 

- French GDP that came in slightly better than expected at 2.2% Y/Y while French

HICP data came inline with Bloomberg estimates. The key data coming up today is

the Eurozone flash CPI data that is due to be released at 1000GMT. MNI median

forecast is for CPI to remain steady at 1.5% Y/Y, however, there are downside

risks due to soft German HICP yesterday.