The EGB market was mostly watching......>

EGB SUMMARY: The EGB market was mostly watching rising yields in the Gilt market

early on in the session and core, longer dated yields were mostly higher. 

- A Reuters article said that ECB policymakers are shifting their focus to the

pace of hikes and that they are happy that the market is pricing in a first hike

in mid-2019. This article immediately took the 10Y Bund yield higher by around

2.5bp to 0.608% but the impact wore off and heading into the close, that yield

gain had been completely reversed. 

- It was not just Bund buying that created the rally, the Gilt market also

underwent a similar path, and to some extent, so did USTs.

- Belgium saw good demand at their auction of 5Y, 10Y, 15Y and 50Y debt.

Slovakia sold small amounts of 5Y and 15Y debt. 

- There was also strong demand for peripheral debt. The Bund-PGB 10Y spread is

at a new 8 year low of 116.5bp. However, Spain led Monday's spread tightening,

with a 2.7bp narrowing down to 77.7bp. 

- Commentators are mostly bullish on EGBs due to low supply and expected

weakening in business survey indicators due to trade war threats.