There was a dip in the German Bund......>

EGB SUMMARY: There was a dip in the German Bund contract at the open but it has

picked up and is on the steady rise. 

- Buying flows developed quickly in the front month Euribor contract that saw

27k purchased. The buying did meet some sellers in the euribors but the risk-off

trade quickly developed as the equity markets turned south.

- On the data front French Industrial production number came in on the soft side

of consensus at 2.6% Y/Y from a revised 3.1%

- Italian and Spanish bonds are all well bid today, recovering from some

underperformance yesterday. We heard that mutual funds were active sellers

yesterday and that they are in no hurry to buy yet. There is also some BTP

10-30Y flattener trade interest, which we heard from three separate sources.

- At present, French debt is underperforming but the flows are said to be very

thin today. 

- The 10Y Bund yield was 0.4bp lower today at 0.425%. The important Bund level

is 163.99 (yesterday's and a 6 week high).