The main mover overnight was the yen,...>

EGB SUMMARY: The main mover overnight was the yen, which strengthened to its

strongest level against the dollar in 15 months as Japanese FM, Aso said that

there were no plans to intervene. The yen's correlation with Treasuries pulled

the latter lower and meant that the Bund contract opened lower.

- Some brief early selling was seen as the 2-10Y German spread broke to its

steepest level since 2014; the belly of the curve has looked particularly heavy.

- French Q4 ILO unemployment data was released before the European open and

dropped sharply and unexpectedly to 8.6% from 9.4%. a look under the hood at the

details was generally positive although much of the improvement was in

part-time/temporary jobs.

- The German Bund yield is currently 1.5bp higher at 1.773% and 2-10Y spread

0.7bp steeper at 132.2bp. peripheral spreads to 10Y Germany are slightly

narrower but nothing big.

- This morning sees Spain issue E4.0-5.0bln of 3 lines and France auctions

E8.0-9.0bln of nominals and separately, E1.5-2.0bln of linkers .