Bonds are down substantially...........>

BOND SUMMARY: Bonds are down substantially globally, including markets normally

considered safe haven. Markets are pricing in a substantially increased expected

supply as government's across the world promise fiscal packages to combat the

economic effects of Covid-19 lockdowns and restrictions.

- Some of the countries that are currently worst affected in terms of rising

numbers of cases are in the Eurozone, so it is no surprise to see spreads

widening further today. Headlines from the ECB's Holzmann that the ECB policy

had reached its limits did not help sentiment on the open (although this was

later clarified). Elsewhere La Stampa reported that the Italian national

lockdown could be extended beyond April 3 with the number of cases showing no

signs of slowing in the country.

- TY1 futures are down -1-16 today at 134-13 with Bund futures down -3.08 at

168.85 and Gilt futures down -2.98 at 131.20.

- Peripheral spreads are moving to multi-year highs, even 2-year. BTP 2y yields

up 58.7bp today at 2.032%, Schatz yields up 8.8bp today at -0.773%.