EGB/GILT: European govvies have........>

BOND SUMMARY: EGB/GILT: European govvies have started the week on a firmer

footing with periphery spreads narrowing. Equities are inching higher and front

oil prices are rallying. Headlines crossing the wires indicate that Chinese oil

demand is almost back to pre-crisis levels. The gradual reversal in lockdown

measures across Europe remains a significant driver.

- Supply this morning came from Germany (bubills, E3.81bn), Belgium (OLOs,

E3.0bn), Netherlands (DTCs, E3.17bn) and Slovakia (SLOVGBs, E643.5mn).

- There has been a dearth of data this morning for markets to react to.

- Gilts are bid with the curve bull steepening. Yields are the short end of the

curve are up 3-4bp.

- Bunds have firms with yields now marginally below Friday's closing levels.

Current yield levels: 2-year -0.7558%, 5-year -0.7488%, 10-year -0.5430%,

30-year -0.1061%.

- BTPs have rallied sharply with spreads over bunds narrowing. The short-end is

outperforming with the benchmark 2-year yield 6bp lower on the day.