There has been a pretty solid, if.......>

EGB SUMMARY: There has been a pretty solid, if unexceptional, bid to the EGB

markets this morning. In Germany, yields have declined fairly uniformly across

the curve although the 2-3Y area ran into some real money selling earlier in the

session. The Bund contract is in the middle of the daily bull channel that has

been evident since late October.

- Peripheral EGB markets have struggled to keep pace. Almost as soon as the

Italian 10Y yield hit the 2017 low of 1.70%, the BTP market began to

underperform the core. 

- Eurozone Nov final PMI data printed in line with the flash estimate of 57.5

for the composite and 56.2 for the service sector. Eurozone retail sales sank

below expectations in October at 0.4%Y/Y although this indicator is unstable.

- Flows have mostly involved heavy roll activity with only around 48 hours

remaining for the Dec-17 contract.

- Austria announced that it would cancel its final auction of the year,

scheduled for Dec 12. This had been half-expected and failed to have a material

impact upon RAGB yields/spreads.