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The reaction to the Senate tax plan.....>

EGB SUMMARY: The reaction to the Senate tax plan passage was strong but, in
fixed income at least, has been faded by investors. The 10Y Bund yield rose by
around 3bp from the start of European trading and initially drifted higher to
0.345% before buyers arrived and brought the yield down to 0.33%.
- There appears no let up in the strong performance of the periphery with Spain,
Italy, Portugal and Greece all tightening by fairly decent amounts. the Bund-BTP
spread bounced off the 1Y low spread of 137.5bp and is currently sitting at
- Michel Barnier has apparently said that a Brexit breakthrough is likely today.
The Schatz and Bund contract both dipped slightly on the news. However, the
market has become somewhat numb to the ebb and flow of "deal is close, not
close, close again" type of headlines.
- Belgian debt started heavy following a good rally on Friday but the decline by
peripheral spreads is taking that markets' spreads to almost 10Y lows.

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