Core and semi core yield extend gains

A busy session for EGBs as we start the week.

• Taper trades have been favoured, which impacted peripheral and particularly the Italian BTP.
• As OATs tested the session low. Yield traded at highest level since March 2020.
• And similar story for Spain, Portugal and Greece, which are all trading wider versus the German 10yr, but we have faded somewhat at the time of typing.. Spain and Portugal moved at one point to the widest levels since November.
• OAT/Bund spread traded at widest since June 2020,
• Some of the reason for the moves in peripheral is that they would be more impacted if the ECB decided to taper and Italy would also be more vulnerable related to issuance.
• Looking ahead, BoE Vlieghe, Haldane, and Fed Kaplan are the speakers left for the day.
• Bund futures are down -0.20 today at 168.78 with 10y Bund yields up 2.2bp at -0.109% and Schatz yields up 0.4bp at -0.658%
• BTP futures are down -0.42 today at 144.96 with 10y yields up 4.7bp at 1.117% and 2y yields up 1.7bp at -0.204%
• OAT futures are down -0.35 today at 158.79 with 10y yields up 3.3bp at 0.293% and 2y yields up 1.4bp at -0.613%.