EGB/GILT

Following yesterday's sharp rally on the back of heightened uncertainty over the outcome of the US presidential election, momentum has subsided this morning as Biden inches closer to the White House.

• The Bank of England increased the capacity of the Asset Purchase Programme by GBP150bn to GBP895bn, exceeding the GBP100bn expansion expected.
• UK Chancellor of the Exchequer Rishi Sunak will update parliament the government's fiscal support measures for tackling the economic impacts of the Covid crisis. Sunak is expected to announce an extension of the furlough scheme by several months.
• Gilts have traded weaker with yields 1-2bp higher. The Dec-20 gilt future trades at 136.19, towards the bottom end of the day's range (L: 136.09 / H: 136.69).
• Bunds started the session on a firm footing but quickly gave up the early gains and now trade close to unch on the day.
• The OAT curve has flattened slightly on the back of the short end trading firmer and yields at the longer end inching lower. The 2s30s spread is 2bp narrower.
• BTPs have rallied with yields 2-4bp lower.