US Treasuries were beaten down hard.....>

EGB SUMMARY: US Treasuries were beaten down hard by the FOMC Minutes but

European debt pushed back against the Treasury move from the start of trading.

The Bund-UST spread has widened to 221.5bp and compares to around 215bp toward

the end of last week. The multi-decade high Bund-UST spread is 235bp and so the

spread is getting good airplay in the market.

- Part of the reason for the strong EGB performance was the weak German IFO

index, which fell to 115.4 from 117.6. Clearly, there are German political

issues that may sit behind some of the drop and it is a fall from a very high

level.

- A downward revision to UK Q4 GDP data also provided an extra little push

higher for bonds.

- Peripheral debt markets are mostly stable following slight weakness at the

get-go. Greek debt is developing some momentum in the wake of yesterday's two

notch upgrade by Moody's, the 10Y spread to Germany is 5.5bp tighter today.

- At 1230GMT, the ECB will release the account of the January Monetary Policy

Meeting.