The market and volume picked up in......>

EGB SUMMARY: The market and volume picked up in the afternoon as NY traders got

to their desks, but overall volumes are well down on averages, due to August

Summer Bank Holiday in London.

- A surprise rise in the ECB's purchase programme and a drop in the oil price

seamed to be the catalyst for move higher in German Bunds, led by the 5-year

part of the yield curve. A couple of receivers in 5Y Euro swaps also supported

bid in that area, while there was a block buy in Bund futures, in an otherwise

quiet day.

- 5-yr Bobl is -2.5bp at -0.337%, while 10-yr Bund is -1.1bp at 0.368%

- Earlier Bunds opened little changed in near non-existing volume/trade, with

the bonds underwhelmed by ECB President Draghi's comments made at Jackson Hole

late Friday.

- Italy sold E2bln in 2-yr CTZ's without any trouble, and ECB money supply data

did not impact markets. 

- 10Y Italy and Spain are circa 1.5bp tighter vs Bunds reversing earlier

widening pressure following solid CTZ supply.