There was a strong domestic bid at......>

EGB SUMMARY: There was a strong domestic bid at the very long end of France that

appeared soon after the European morning and French debt smartly outperformed

Dutch and other semi core markets. The buying subsided just as quickly but the

15-30Y sector of France remains the best performer on the day with a 1.5bp

decline in yield on the day.

- By contrast, watching the Bund contract has been like watching paint dry; it

has shown almost no movement at all.

- Morning activity has been dominated by heavy supply. First off was a well bid

3Y and 7Y BTPs auctions, the 2036 saw less interest. The German 10Y auction also

saw a very good level of demand as did the 10Y PGB, which quickly saw a 2bp

tightening of the spread to Germany.

- Gilts rallied on the back of weak average weekly earnings data but EGB markets

failed to capitalise on the Gilt market volatility.

- The Greek finance minister mentioned that Greece was looking beat its primary

surplus forecast and plans to tap debt in the coming six to seven months

according to a Reuters interview.