EGB/Gilt - Attention turns to NFP

A more subdued, calmer session for EGBs, with ALL EYES on NFP tomorrow.

• Contracts have held onto gains, but we mostly trade at mid ranges.
• Italy and Spain have outperformed Bund today, with report of decent buying on screens this morning and this afternoon in 10yr.
• As such, Spain and Italy are 2.6bps, and 3bps respectively tighter versus the German 10yr.
• BoE day, saw the meeting on the balance as expected.
• Bailey said that the MPC is focused on medium term inflation risks.
• On sequencing, Bailey said he "pushes back" on view that interest rates are not the active tool and that interest rates are the primary tool.
• Gilts are trading close to flat on the session, while the Gilt/Bund spread has widened by 1.8bp.
• Looking ahead, Fed's Kashkari speaks at virtual townhall event.
• But focus will be squarely on NFP tomorrow.
• Gilt futures are up 0.04 today at 130.18 with 10y yields up 1.7bp at 0.528% and 2y yields up 2.5bp at 0.083%.
• Bund futures are up 0.34 today at 177.28 with 10y Bund yields down -0.1bp at -0.503% and Schatz yields unch at -0.785%.
• BTP futures are up 0.62 today at 155.59 with 10y yields down -3.3bp at 0.519% and 2y yields down -0.2bp at -0.504%.
• OAT futures are up 0.39 today at 162.87 with 10y yields down -1.3bp at -0.165% and 2y yields up 0.1bp at -0.721%.