Bunds continue their descent as spreads tighten further

Bunds remain lower beta than both Treasuries and gilts but were the first of the three core bond markets to fall below yesterday's lows today. The move has accelerated slightly on the news that the EU parliament had finally signed off on the stimulus deal that EU leaders announced back in July. In a generally risk-on day (as markets continue to digest yesterday's Pfizer vaccine success news), peripheral spreads have also tightened.

• The focus for Bunds now turns to the Oct 7 low of 173.93.
• Bund futures are down -0.38 today at 173.98 with 10y Bund yields up 2.7bp at -0.484% and Schatz yields up 1.6bp at -0.719%.
• BTP futures are down -0.12 today at 149.34 with 10y yields up 0.7bp at 0.763% and 2y yields down -0.8bp at -0.374%.
• OAT futures are down -0.23 today at 168.53 with 10y yields up 1.7bp at -0.239% and 2y yields up 0.1bp at -0.672%.