There is a small bid to the EGB space...>

EGB SUMMARY: There is a small bid to the EGB space today although the Spanish

market is lagging, perhaps a response to the fast-approaching Catalan election

on Dec 21.

- The 10Y German yield is 0.7bp lower at 0.30% and there is little to

distinguish movements in various parts of the yield curve. 

- The only meaningful economic data release has already been seen. French

business sentiment for Nov remained stable at 106 in November, defying

expectations for a small rise to 107. Despite missing consensus, a level of 106

is the highest since 2011. 

- Sterling and Gilt yields are interesting following a weekend of Brexit

chatter. Gilt yields have declined 1.7bp in early trade and given their recent

volatility perhaps provide the best chance for some direction in pre-Christmas

trade.

- Otherwise, money markets are gearing up for the year end turn and much has

been written on the topic of recently big cross-currency basis swap movements.

- Supply is small this week and empty next. A E13bln Schatz redeems on Friday.