There has been a very bullish...........>

EGB SUMMARY: There has been a very bullish reaction to the FOMC, relief that the

Fed could have put an extra rate hike into the 2018 dotplots. 

- The Jun-18 Bund contract opens 21 ticks higher at 158.09 and has almost not

stopped rising since. Currently the 10Y Bund yield is -4bp at 0.555% and

returning to the levels seen in the third week of January. Importantly, the

158.55 level, which is the 61.8% Fibo level coming from the 160.98-154.62 swing

stopped the market. 

- There is a lot of discussion of curve slopes with the US curve flattening

again to new lows. In Europe, the 5-30Y German curve is 124bp and at its lowest

since November 2016. In the US, most of the swap flow has been steepening but

directional trades appear increasingly executed with fly trades.

- Eurozone Markit PMI data were quite weak with Flash Dec Composite PMI At 55.3

(57.1 in February), signalling the slowest growth in a year.

- German IFO March business climate index printed 114.7 vs February's 115.4

- Italian/Spanish spreads to Germany are very slightly wider but the Bund-PGB

10Y is 4.4bp wider at 121bp.