The passage of the US tax plan in the...>

EGB SUMMARY: The passage of the US tax plan in the Senate has boosted the equity

markets but deflated debt markets. 

- The dollar appreciated at the Asian open and then again at the open of

European trade. Despite these two jumps, the dollar index is only 0.4% higher

that the Friday close of business in the US.

- The 10Y Bund yield is 4bp higher than on Friday at 0.342% and the curve is

bear steepening since the 2Y Schatz yield is only +0.8bp at -0.697%.

- Bloomberg reports that the recent eonia spike was caused by one of the Greek

banks finding itself with excess liquidity and lending it out. There has been no

obvious impact upon eonia swaps.

- Peripheral debt is outperforming the core, led by a 6bp compression in the

Bund-GGB spread to 508bp. Spanish, Portuguese and Italian spreads to Germany are

holding close to their respective multi-year lows. However, the compression in

semi-core spreads to Germany seen last Friday is unwinding. French and Belgian

spreads are around 0.5bp wider at 10Y. 

- Futures roll activity and Brexit dominate today. There is no supply/big data.