The EGB market opened Thursday in a.....>

EGB SUMMARY: The EGB market opened Thursday in a relatively stable fashion,

there was a subtle downward movement as the pre-auction set up began. 

- The first hurdle was the Spanish auction, which went poorly. Even before the

auction results were printed, the dealers were pushing Bund-Bonos and Bund-BTP

spreads wider. The French auction came as a relief and saw decent bidding. 

- It took a strong Gilt auction to send the Bund contract starkly higher. The

rally took the Bund contract to 158.00 at which point volumes leapt higher as

stops were triggered in turn taking the contract another few ticks higher. 

- The final auction of the day was the French linker where cover ratios were

again quite solid.

- The German 2Y yield is -0.4bp at -0.58% and the 10Y is -1.6bp at 0.577%, a 7

week low. The Bund-BTP spread is 1.4bp wider at 143.6bp.