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

EGB SUMMARY: The Mar-18 10Y Bund contract reached intra-day lows 163.27 as there

was an early risk-on feel to the markets as it digested reports that the US

congress will pass a tax code overhaul with a Senate vote as early as Tuesday,

and following Portugal's two notch rating upgrade.

- The front-end of the German curve has come under the most pressure with the

2Y-5Y part of the curve around 1.8bp lower. While yield on 10Y and above are

little changed having recovered from early morning losses. Therefore, bear

flattening the yield curve with 2s10s 1.6bp flatter.

- Today's biggest performers in the EGB arena are Portuguese, Italian, Spanish

and Greek bonds. The The Bund-PGB spread has tightened by 6.7bp to 147.3bp in

wake of Fitch upgrading it from BB+ to BBB.

- There was little initial reaction to Eurozone final Nov CPI that came in

unrevised at 1.5% y/y.

- In terms of data, the US NY Fed Business Leaders Survey will be released at

1330GMT and at 1500GMT the US NAHB Builder Index will cross the wires.