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EGB/GILT

BOND SUMMARY

European government bonds have traded firmer this morning, while EGB periphery-core spreads have narrowed.

  • Gilts have lacked momentum and direction so far and trade in line with yesterday's closing levels.
  • Bund yields are 1-2bp lower on the day with the curve marginally bull flattening.
  • OATs trade in line with bunds. Last yields: 2-year -0.6704%, 5-year -0.6040%, 10-year -0.2512%, 30-year 0.4372%.
  • Portuguese OTs have slightly outperformed with yields at the longer end down 3bp on the day.
  • Supply this morning came from Ireland (Treasury Bonds, EUR1.5bn).
  • With the exception of German trade data (weaker than expected trade balance on the back of faster growth in imports vs exports), there was no tier one European data this morning.
  • The UK health minister Nadine Dorris has warned that the nation's hospital are 10 days away from being at a 'critical' stage as a result of surging coronavirus infections. Her comments follow a progressive tightening of social restrictions in recent weeks.

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