There was some reversal of the..........>

EGB SUMMARY: There was some reversal of the risk-off sentiment in the afternoon

and especially at open of US equity markets, but EGBs hold onto slight gains

going into EU close with the exception of the very short-end.

- Spanish, Italian and Portuguese bonds are 2-4bp tighter to Germany in the 10Y

sector of the yield curve as yield-hunting continues to outweigh potential

political hiccups in Italy.

- Financial sector issuance has trickled through the markets but sovereign

supply has been limited to a poorly bid (as usual) German Obl auction. This

offering came right at the low point of the day's price action.

- Currently, the 10Y German yield is down 1.5bp at 0.660%, roughly where trading

started today. However, most gains price initially seen sub-5Y have disappeared.

The 2-10Y German curve spread is down 1.5bp today. Futures invoice swap spreads

show German futures contracts are underperforming the swap curve at all

maturities, likely linked to compression of Core-peripheral spreads.

- Understandably, roll activity has been intense with this being the last full

day's trading remaining for Mar-18 Eurex contracts.