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EGB/GILT

BOND SUMMARY
Core European govies have rallied this morning and curves have bull flattened as social restrictions across Europe continue to be tightened in response to rising coronavirus infections. Equities are lower across the board and the US dollar is on the front foot against G10 FX.
  • Gilts yields are 1-6bp lower and 2s30s is 5bp narrower.
  • Bunds have similarly traded firmer with cash yields at the longer end trading down 5bp.
  • OATs are only slighly lagging the bund rally. Last yields: 2-year -0.7219%, 5-year -0.6876%, 10-year -0.3422%, 30-year 0.3338%.
  • BTPs have sold off and the curve has bear steepened. Yields are 2-4bp higher on the day.
  • Supply this morning came from France (OATs, EUR7.2bn and Linkers, EUR1.0bn), Spain (Bono, EUR2.325bn and Ireland (Bills, EUR0.75bn).
  • Mirroring the tightening of social restrictions in Northern England, London now faces additional curbs from midnight on Friday.
  • The European data calendar was light again today. The final French CPI print for September was in line with the initial estimate.

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