The US 10Y auction was pretty solid.....>

EGB SUMMARY: The US 10Y auction was pretty solid but that did not prevent

Treasuries from softening towards the close as the market concentrated upon the

House and Senate tax plans. That weakness translated into a soft EGB opening on

Thursday. The Bund contract started trading 13 ticks lower at 163.27 but has

pulled back nearly all of the losses as Europe pays lip service to the details

of the US tax plan.

- The EGB market is benefiting from small amounts of supply this week alongside

front-loading of ECB PSPP activity ahead of thin December liquidity conditions.

- So far today, core-periphery spreads are nearly static and the 10Y Bund yield

is +0.3bp at 0.329%.

- Markets are looking forward to the ECB Bulletin at 0900GMT and a host of ECB

speakers. However, many of these speeches are unlikely to discuss monetary

policy.

- Later this morning, Ireland concludes its 2017 issuance with E1.0-1.25bln of

2026 and 2045 maturity bonds. There is no escaping that Irish yields are low on

an historical basis and spreads to the core are slim.