The ECB did not disappoint..............>

EGB SUMMARY: The ECB did not disappoint expectations today, increasing the PEPP

programme by EUR600bln (and of course leaving policy rates unchanged).

- Periphery EGB spreads got crushed (10Yr BTP spreads dropped as much as 23.7bps

post-announcement), with core FI weakening. Inflation breakevens/swaps ticked

higher and the Euro reached highest levels since Mar 12.

- Prior to that, the morning's supply appeared to be absorbed reasonably well;

Spain tightened vs Italy amid Bono/Obli sale of just under EUR8bln, while France

sold EUR11bln OAT (top of indicated size range).

- German curve has bear steepened sharply. ** Latest levels:

* Jun Bund futures (RX) down 37 ticks at 170.6 (L: 170.4 / H: 171.34)

* Germany: The 2-Yr yield is up 1.3bps at -0.618%, 5-Yr is up 0.5bps at -0.572%,

10-Yr is up 3.2bps at -0.322%, and 30-Yr is up 6.2bps at 0.184%.

* Jun BTP futures (IK) up 179 ticks at 143.42 (L: 141.08 / H: 143.74)

* Italy / German 10-Yr spread 18.7bps tighter at 172.1bps

* Sep OAT futures (OA) up 38 ticks at 164.92 (L: 164.37 / H: 165.41)