Covid Concerns Continue

Fears of a second wave of Covid infections, particularly across Europe,
have seen core bond markets moving higher globally while peripheral
spreads have widened.

• Germany has advised against travel to the Spanish regions of Aragon,
  Catalonia and Navarra following the news over the past few days that the UK
  and France have also cautioned against travel to Spain.
• Covid numbers are starting to pick up a little from low bases elsewhere in
  Europe and the fear is that with travel insurance companies not covering
  cancellations due to Covid restrictions or quarantines less people from the UK
  and northern Europe will spend their holidays in southern Europe. This is
  leading to fears that southern European economies will be even more heavily hit
  ahead of the crucial summer holiday period.
• Spanish spreads are not being disproportionately hit within the Eurozone
  periphery, with a more broad-based risk-off move in FI markets.