The German 10-year Bund yield...........>

EGB SUMMARY: The German 10-year Bund yield oscillated within a 1.6bp range on

Wednesday with very little data to digest. The 10Y Bund yield is currently

trading +1.4bp higher.

- Spanish PM Mariano Rajoy asked for clarification from the Catalan regional

government president as to whether he had declared independence in his speech to

the Catalan parliament yesterday. Lower yields across the Spanish curve today

meant that the curve was flatter. The Bund-Bonos spread started 6bp tighter ids

closing 6bp tighter 121.5bp.

- The DSTA successfully sold E6.6bln of a new 7Y via DDA, close to the top of

the E5-7bln pre-announced range. Over the course of the auction, there was a

subtle Dutch bond outperformance.

- Germany sold E3bln of the Obl S174 with a decent bid and Portugal also managed

to sell 1.25bln of 5Y and 10Y paper.

- EGB option flows included call spreads on the German contracts, taking

advantage of the low implied volatility and proximity to the likely ECB taper

announcement on October 26.