There is subtle weakness in the EGB.....>

EGB SUMMARY: There is subtle weakness in the EGB space this morning, the 10Y

Bund is trading 0.7bp higher at 0.463%. Spain is not quite as lucky; +2.0bp so

far today.

- Yield curves are moving in a fairly parallel fashion and no doubt the

immanency of the US employment report later today is dampening potential

volatility. The chatter we hear from our US contacts is that it would need a

50k+ payroll report to create a bullish Treasury market reaction given the

impact of hurricanes.

- In Spain, there is little fresh news on the independence issue and the IBEX is

down just 0.2% this morning, with Banco Sabadell making the tiniest of gains.

- Yesterday, Germany announced that it would sell E1bln of the Bundei 0.1%

Apr-26 on Tuesday and this represents the next supply for the Eurozone. However,

so far next week's EGB supply looks very thin.

- Friday morning's European data showed a consensus-busting 3.6%M/M rise in

German factory orders in Aug and Spanish Sept IP also came in well north of

expectations at 1.8%Y/Y.