EGB/Gilt

Core EGBs trade weaker and the periphery mixed heading into the ECB meeting.

• Gilts started session on a firm footing but have gradually sold off through the morning with yields 1bp above yesterday's close.
• Bund yields are similarly 1bp above the close.
• The OAT curve has marginally steepened with the 2s10s and 2s30s spreads 1bp wider on the back of longer end yields drifting higher.
• BTPs rallied in early trade, but quickly gave back the gains with yields now marginally below the last close.
• Focus is on the ECB today, although no material changes in monetary policy are expected. Questions during the press conference will concentrate on the ECB's tolerance for further euro strength, the impact of recent lockdown restrictions on economic activity and whether or not the current PEPP envelope provides a ceiling on asset purchases.
• Supply this morning came from the UK (Gilts, GBP3.25bn), France (OATS, EUR9.993bn, Linkers, EUR2.37bn), Spain (Bonos/Oblis, EUR6.104bn), and Ireland (T-Bills, EUR750mn)