The Mar-18 10Y Bund contract opened.....>

EGB SUMMARY: The Mar-18 10Y Bund contract opened marginally lower this morning

at 163.46. However, as the morning progressed the contract headed lower to

163.27. The move lower was seen in a thin volume environment as markets are

trading light as we approach the holiday season. Bunds opened with a slightly

risk on feel this morning as it is expected that Congress will pass a tax code

overhaul with a Senate vote as early as Tuesday. The front-end of the German

curve has come under pressure and the curve has bear steepened in early trade.

- On Friday Fitch upgraded Portugal's credit rating two notches from BB+ to BBB,

with a stable outlook. The Bund-PGB spread has tightened this morning by 9.2bp

to 144.7bp.

- This week on 21st of Dec on Thursday Catalans will vote in regional elections.

As reported by the newspaper Politico "latest surveys have the camps

neck-and-neck." The Bund-Bonos spread has tightened 3.3bp and is at 112.4bp.

- In terms of data outlook markets await Eurozone CPI figures at 1000GMT and

with regards to supply there are no scheduled issuance this week.