Covid Concerns Continue

Core fixed income globally has continued to grind higher today with Bunds outperforming both gilts and Treasuries. At the time of writing 10y Bund yields are down 4.8bp, gilt yields down 3.9bp and UST yields down 2.9bp.

• Against this backdrop peripheral and semi-core spreads have all widened.
• Covid concerns have continued with increasing localised outbreaks across many European countries continuing to feed fears of a second wave.
• There has been little market reaction to the German GDP, inflation or unemployment prints released earlier today.
• Bund futures are up 0.74 today at 177.69 with 10y Bund yields down -4.8bp at -0.549% and Schatz yields down -3.1bp at -0.721%.
• BTP futures are up 0.32 today at 147.34 with 10y yields down -2.1bp at 0.970% and 2y yields down -0.1bp at -0.74%.
• OAT futures are up 0.51 today at 168.97 with 10y yields down -3.8bp at -0.222% and 2y yields down -1.7bp at -0.642%.