The German yield curve has shown........>

EGB SUMMARY: The German yield curve has shown almost no net movement across the

entire yield curve over the course of the morning's trade. However, there was a

period of fairly frenetic outperformance of the BTP market that appeared to be a

response to both a less-hawkish speech by Weidmann and a 2Y BTP future block

trade. From initially showing widening pressure, that buying took the Bund-BTP

spread 3bp tighter to almost unchanged on the day at 120bp.

- Italian political news has not been favourable as Forza Italia's partnership

with the League is looking more strained after Salvini's Party published its

program that included a desire to renegotiate EU Treaties and start a process to

leave the Eurozone. Salvini's rebuttal of some of Forza's programme and media

appearances display obvious difference with Berlusconi's party.

- Ireland encountered decent demand at its 10 and 15Y auctions and sold the

maximum amount.

- Of the many ECB speakers today, only the slightly greater emphasis on the

Euro's strength by Weidmann is worth mentioning.

- French business confidence slid in January and briefly pushed up EGBs.