EGB/Gilt: Firm Start

European government bonds have firmed at the beginning of the week with equities edging lower following a weak session for Asian stocks. Political ructions in the UK and Sweden have provided some background noise.

• The gilt curve has slightly flattened with the 2s30s spread 1bp narrower.
• Bunds rallied soon after the open, before sliding back towards the Friday close.
• OATs have firmed while similarly trading near the previous close.
• BTP yields are broadly 1bp lower across much of the curve.
• Swedish Prime Minister Stefan Lofven announced his resignation today after his government lost a no confidence vote in parliament last week. Swedish sovereign yields have edged up 2bp on the day.
• The UK's new Health Secretary Sajid Javid has indicates that he would like to see an end of Covid restrictions as soon as possible. For the Conservative government, Javid's appointment is hoped to quell the turbulence of recent days following Matt Hancock's abrupt departure.
• Supply this morning came from Germany (Bubills, EUR3.521bn), Italy (BOTs, EUR6.5bn) and Belgium (OLOs & Green OLO, EUR3.791bn).
• The data slate has been light this morning with no tier one releases.