The ECB press conference initially......>

EGB SUMMARY: The ECB press conference initially and somewhat confusedly led to a

substantial rise in Bund yields but the past 12 hours have gradually pulled back

some of those losses back, approximately half. The 10Y Bund yield is at 0.604%

this morning but the 30Y section of the yield curve is the driving force this

morning, declining 2.5bp in Germany to 1.278%.

- The belly of EGB curves suffered yesterday after the ECB and is still weak

this morning. In a rare occurrence, the 2Y Schatz yield is flat on the day, so

is everything above 8Y but the 5Y yield is 1.1bp higher today.

- Peripheral spreads are slightly wider today (1.3bp at 10Y for

Bund-BTP/Bund-Bonos) although there is some Italian CTZ and BTPei supply later

today.

- Attention is firmly on the Euro exchange rate although the high and positive

correlation to the 10Y Bund yield has gone today.

- Reuters has an ECB 'source' story today saying that a "There will be a serious

discussion about the easing bias in March" and that the "rise in the euro is a

serious matter".