During the 4th quarter of 2017 the prices of core government bonds rose marginally. Specifically, the yield-to-maturity of the ten-year German government bond remained stable at 0.47%, while the yield of the two-year German government bond dropped by 12 bps to -0.69% causing the yield-to-maturity curve to flatten. The European Central Bank (ECB) left its interest rates unchanged at the December’s meeting. Mr. Draghi repeated that the main interest rates will remain at low levels for an extended period of time. ECB confirmed that they will continue asset purchases, 30 billion Euros monthly, until the end of September 2018, or beyond, if necessary, and in any case until they see a sustained adjustment in the path of inflation consistent with its inflation target. The low expectations regarding the inflation’s path keeps the government bonds’ yields at low levels. In Spain, at the regional Catalonian elections, the pro-independence parties maintained the majority of seats at the local Parliament. During the quarter, the elections in Spain and the uncertainty about the upcoming elections in Italy (until May 2018) kept nervousness in the periphery bond prices. The political risk regarding the upcoming elections in Italy, the elections’ result in Spain and the difficulties in creating a coalition government in Germany kept the government bond yields bonds at low levels.