EGB/Gilt - Bear Steepening Ahead of The Fed

European sovereign bonds have sold off alongside a move lower in equities and broad USD dollar strength against the G10 (modest cable gains are a notable outlier)

• The market is focused on the FOMC later today. Although a material change in monetary policy is not expected, the revised economic forecasts will be closely watched.
• Gilts have led the charge this morning, underperforming core EGBs. Yields are 2-5bp lower with the curve 3bp steeper.
• Bunds have similarly traded weaker with the long-end under more pressure. The 2s30s spread is 2bp wider on the day.
• OAT yields are broadly 1-3bp higher with the curve similarly 2bp steeper.
• BTPS have underperformed core EGBs. Yields are up 1-4bp.
• Supply this morning came from the UK (Gilt, GBP2.25bn), Germany (Bund, EUR1.222bn allotted) and Portugal (Bills, EUR1.5bn). Greece is today placing EUR2.5bn of a 30-year issue.
• The final Eurozone CPI print for February matched the flash estimate (0.2% M/M, 0.9% Y/Y).