EGB/Gilt Bear Steepening​

European sovereign bonds have traded weaker this morning and curve have bear steepened alongside broad equity gains.

• Gilts have sold off with cash yields now 2-4bp higher on the day and the curve 1-2bp steeper.
• Bunds similarly underperform at the longer end. Last yields: 2-year -0.7293%, 5-year -07142%, 10-year -0.4906%, 30-year -0.0487%.
• BTPs have traded weaker with yields 1-2bp higher and the curve marginally steeper.
• Supply this morning came from the UK (Gilts, GBP4bn), Germany (Schatz, EUR4.7315bn allotted), Belgium (TCs, EUR0.81bn) and the ESM (Bills, EUR1.5bn).
• The preliminary Q4 GDP print for Italy came in line with expectations (-2.0% Q/Q), while the Eurozone aggregate was marginally better (-0.7% Q/Q vs -0.9% survey). Elsewhere the flash January CPI print for France beat expectations (0.8% Y/Y vs 0.5% expected).
• The FT reports that Brexit checks on food products at Northern Ireland's largest ports have been suspended following concerns that staff members could be threatened. The move follows the EU's recent and quickly abandoned decision to invoke the Article 16 protocol in a bid to shore up the bloc's vaccine supplies - a move that risked inflaming tensions over the Irish border.