EGB/GILT

Core European govies have sold off this morning while the periphery has rallied and equities appear to have gained a footing following yesterday's sell off.

• The gilt curve has bear flattened with the 2s30s spread 2bp narrower.
• Bunds have similarly trade weaker with cash yields 1-2bp higher on the day.
• OATs now trade close to unch on the day. Last yields: 2-year -0.6478%, 5-year -0.6185%, 10-year -0.2531%, 30-year 0.4252%.
• BTPs have rallied with yields 3-5bp lower and the belly slightly outperforming.
• BoE Governor Andrew Bailey has indicated that a move into negative interest territory was not on the cards in the near term, while indicating that staff are analyzing the technical details of how such a policy would be implemented.
• Supply this morning came from Germany (Schatz, EUR4.0bn). The Netherlands offering the 0% Jan-52 via DDA with order books last at >EUR18bn. The UK is tapping the 0.5% Oct-61 gilt through syndication.
• Having hinted at the possibility of fresh social restrictions, the UK government has now announced that workers will be asked to stay at home if possible.
• The data calendar is particular light today. UK CBI Trends Total Orders for September came in slightly below expectations (-48 vs -40 survey). US Existing Home Sales for August and the Richmond Fed Manufacturing Index data for September will be published later today.