Yesterday's equity rally has fallen.....>

EGB SUMMARY: Yesterday's equity rally has fallen back today bringing gains for

EGBs and other risk-off assets. 

- The Mar 19 Bund future is up 26 ticks at 163.62, having traded in a range of

163.15-163.77 today.

- Gains have been fairly even across the Bund cash curve, the 2s10s bull

steepening by 0.3bps. 

- The 2-Yr Bund yield is down 2bps at -0.623%, 5-Yr down 2.2bps at -0.32%, 10-Yr

down 1.7bps at 0.233%, and 30-Yr down 1.7bps at 0.857%.

- The EU have said they will accept France running a budget deficit higher than

the 3% ceiling next year as a 'one off'.

- This has had little impact on the OAT curve, which has lacked direction

throughout the morning. 

- Small gains can be seen from the 3-yr through to the 7-yr sections of the OAT

cash curve with longer maturities down. The 10-yr yield is up 0.3bps at 0.692%. 

- No ECB speakers this week, November inflation data is released tomorrow for

both Germany and Spain.