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Firm Within Its Bull Channel


Monitoring Trendline Support


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European sovereign bonds traded weaker this morning before news that the US is calling for a pause on the Johnson & Johnson vaccine due to clotting fears triggered a leg higher for core EGBs.

  • Gilts now trade above yesterday's close with the curve a touch flatter.
  • The bund curve has similarly bull flattened with the 2s30s spread 1bp narrower on the day.
  • OAT yields are 1bp lower at the longer end.
  • The UK economy returned to positive growth in February, despite the national lockdown. The industrial sector has fared particularly well with output beating expectations.
  • Supply this morning came from the UK (Gilt , GBP1bn), Germany (Linker, EUR0.387bn allotted), Italy (BTPs, EUR7.75bn), Spain (Letras, EUR6.752bn), Belgium (TCs, EUR2.0bn), Finland (RFTBs, EUR2.0bn), the ESM (Bills, EUR.1bn). Syndications today include: Spain (15-year bond) Austria (dual tranche for 4-/50-year issues) and the Netherlands (0% Jan-38 DSL).