The EGB market went through several.....>

EGB SUMMARY: The EGB market went through several waves of buying and selling on

Friday but heading into the close, but the net movement was unremarkable with

the 10Y Bund yield down just 0.8bp. 

- Portugal announced that it would sell E1.0-1.25bln of 10Y next Wednesday but

the announcement failed to impact PGBs. In fact, the Bund-PGB spread tightened

3bp on the day to its lowest since May 2015 at 169bp. Other peripheral spreads

were close to unchanged on the day.

- There was talk about the low Eurozone supply calendar next week and we heard

market talk of an Italian exchange auction (into a 15Y security) as a possible

filler in a supply hole.

- The reaction to the weak payroll report was a knee-jerk rally that was

immediately sold into with people dismissing the report as too heavily

influenced by the storms and so unreliable. A sudden surge in the dollar in the

late European afternoon also helped to deflate bonds.

- There was no European data or supply of note on Friday.