There was a strong start to trading.....>

EGB SUMMARY: There was a strong start to trading as China's SAFE denied that

they were about to slow or stop UST purchases. EIB quickly announced that it

would sell 30Y debt, which ultimately turned into a E2.5bln sized issue.

- Peripheral debt was strong throughout the morning and the tightening of

spreads breezed through fairly lacklustre 3Y and 7Y BTP auctions.

- The game-changer was the release of the ECB Minutes, which suggested that the

ECB might change forward guidance fairly soon. This hit the EGB space hard. The

5Y Obl initially hurt most, then the 2Y yield rose later on as heavy put buying

showed up in futures. Towards the close, another wave of selling swept through

in the 5Y sector.

- Heading into the close, the German Schatz was +5.3bp at -0.562%, the 5Y +8bp

at -0.113%, the 10Y +5.3bp at 0.596% and the 30Y only +2.4bp at 1.348%.

- The movement in core-periphery spreads was unorthodox with Portugal performing

strongest, Greek debt widening 9bp to a weak German 10Y.