EGB/Gilt

Markets are broadly trading in a risk-on fashion with G10 FX gaining against the dollar, equities pushing higher, oil rallying and core EGBs selling off alongside firmer trading in the periphery.

• Media reports that Donald Trump has instructed his government to facilitate the Biden transition have been well received and further dilutes the risk of significant frictions with respect to Trump's departure.
• Supply this morning came from the UK (Gilts, GBP4.0bn) and the Netherlands (DSL, EUR1.64bn). The final details of the new Jul-35 EU SURE bond have been published, with the issue size set at EUR8.5bn and books last above EUR90bn.
• The final estimate of Q3 GDP for Germany came in above the previous estimate (8.5% Q/Q vs 8.2%).
• Bunds traded weaker earlier into the session, but have since clawed back losses to now trade close to unch on the day.
• It is a similar story for OATs. Last yields: 2-year -0.691%, 5-year -0.6744%, 10-year -0.3463%, 30-year 0.3515%.
• BTPs have rallied with cash yields up to 2bp lower on the day. The curve is 1bp flatter overall.
• The gilt curve has bull flattened with yields at the longer end pushing down 3bp.