Bunds move lower on positive risk sentiment but outperform USTs and gilts

Bunds have seen a quieter day than Treasuries and gilts - which have seen lots of volumes going through futures as market participants roll the Dec contacts to March. Peripheral spreads are broadly unchanged with the exception of BTP spreads which have narrowed around 2bp at writing.

• As with other core fixed income, Bunds have been on the backfoot today, helped by the news that the AstraZeneca / Oxford Covid-19 trials have been successful (although not as successful as the Pfizer or Moderna trials thus far).
• The EU will hold another syndication tomorrow as it continues to build out the curve through its SURE bonds. The new bond will mature in Jul-35 (15-years from now) which will mean that the EU SURE curve will comprise benchmarks at 5, 10, 15, 20 and 30 year points. Around EUR8-9bln is expected to be issued and it is expected that this will be the last issue of the year for the EU SURE programme.
• In the only notable ECB speech of the day, Executive Board member Schnabel said that "A high level of excess liquidity may further reduce cash-driven activity in some market segments, potentially raising challenges for setting money market benchmark rates." With the market already aware of this, it had little market impact but it is good to see the ECB on top of these issues.
• Bund futures are down -0.09 today at 175.44 with 10y Bund yields up 0.4bp at -0.580% and Schatz yields down -0.1bp at -0.761%.
• BTP futures are up 0.22 today at 151.21 with 10y yields down -1.5bp at 0.617% and 2y yields down -0.8bp at -0.410%.
• OAT futures are down -0.07 today at 170.08 with 10y yields up 0.6bp at -0.344% and 2y yields up 0.4bp at -0.690%.