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

EGB SUMMARY: There was a small dip in the Bund contract soon after the market

open but as the RXH8 bottomed out at 161.40, buying appeared.

- Real money was said to be active across the yield curve but stronger buyers

were in the 2Y sector of the French curve and this is now the best performing

EGB sector today with a 1.5bp yield decline.

- December's Eurozone economic confidence index, a summary of six other

confidence indices rose to its highest level in 16 years at 116.0. If the

closely correlated GDP index followed this survey result, then we'd be talking

of 4%+ growth in Europe. However, debt markets rarely respond to what is one of

the more useful survey indicators.

- There is a high expectation that there will be a syndicated 10Y EGB this week

but Monday morning has come and gone without any announcement or hint from the

market. 

- Peripheral markets are fairly stable against the core. Italy should detail

Thursday's M/L auction after the EGB close tonight.