The ECB removed reference to............>

EGB SUMMARY: The ECB removed reference to increasing size/duration of the APP in

the press statement. This was interpreted hawkishly with the 10Y Bund yield

quickly surging higher before once again being turned back by the 0.70% yield.

- Hawkish info ended with the press statement and by the end of press conference

the market was left with the impression that time has passed but the ECB was no

closer to ending QE/hiking rates. Draghi described policy as 'reactive'.

- A short-covering rally ensued and 42k Bund contracts traded in around 6

minutes. Heading toward the close, the entire German curve was around 1bp lower

on the day, with the 10Y at 0.646%.

- Italian debt was strong on market chatter that the League might propose a more

moderate Roberto Maroni as PM in order to obtain support from the PD to form

government. The Bund-BTP narrowed 5bp over the course of the day.

- Ireland sold E0.5bln each of 5Y and 10Y paper against good demand but also a

nice concession.

- Flows saw some earlier dealer selling in 15Y BTPs early in the session,

possibly linked to BTP supply next week.