the most interesting price action was...>

EGB SUMMARY: the most interesting price action was at the open of European

trading as the Bund contract opened slightly lower and then quickly fell. There

had been some strong and sudden TY volumes in the overnight session and

generally-speaking, this was a flow- rather than data-dominated session.

- Austrian Central Bank, Nowtony spoke on ORF radio in which he stated that the

ECB should end QE after September if the economy allows and in line with

implicit ECB guidance, does not see a rate hike before 2019 and indeed stated

that this is what ECB guidance implies.

- Peripheral debt has blown hot and cold lately and on Friday, Italian debt was

well bid. There was a large sized BTP future trade during the morning, which may

have contributed to the 3bp 10Y spread tightening to Germany.

- The Bund yield is 2bp higher today at 0.391% and market participants are aware

that next week's issuance is heading towards a chunky E30bln even if France

announced today that it would sell only E4-5bln of nominals and E1.5-2.0bln of

OATei securities at its auction next week.