EGB/Gilt: Core FI Firms

Core European sovereign bonds have broadly firmed this morning with price action relatively contained.

• The gilt curve has bull flattened with cash yields 1-3bp lower and the 2s30s spread narrowing 1bp.
• Conversely, the bund curve has bull steepened on the day with the 2s30s spread widening by 3bp.
• The OAT curve has also steepened sharply on the back of the short end rallying and longer end yields inching higher. The curve is now 4bp steeper at the long end.
• BTPs firmed early into the session before selling off. Yields are now 1-2bp higher.
• Supply this morning came from Germany (Bund, EUR980mn allotted).
• German IFO data for November was broadly in line with expectations.
• Focus this afternoon turns to the second estimate of US Q3 GDP, preliminary durable goods orders for October and PCE for the same month.