EGB/Gilt: Curve Steepening

European curves curves have broadly steepened this morning alongside gains for equities.

• Gilts started the session on a weak footing before recovering losses and now trade close to flat on the day.
• The bund curve has twist flattened with the 2s30s spread widening 4bp.
• It is a similar story for OATs where the curve is 2-3bp steeper.
• BTPs have recovered some of the earlier losses while still trading below yesterday's close. Cash yields are 2-4bp higher.
• Speaking in Le Monde newspaper, the ECB's Francois Villeroy de Galhau stated that euro area inflation is now likely near a peak. Meanwhile Olli Rehn suggested that raising rates too fast risks damaging the economy and that policy normalisation should be conducted at a gradual pace.
• UK Foreign Secretary Liz Truss met with her Russian counterpart Sergei Lavrov for talks in Moscow. Reflecting the simmering tensions between both nations, Truss urged Russia to respect Ukrainian sovereignty while Lavrov stated that bilateral relations were at their lowest point in years and played down Western threats.
• The final results from Portugal's legislative elections confirm that Prime Minister Antonio Costa's centre-left Socialist Party (PS) has won an outright majority.
• Supply this morning came from Italy (BOTs, EUR6.5bn).