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EGB/Gilt: Firming Across The Board

BOND SUMMARY

European government bonds have pushed higher this morning alongside broad gains for equities.

  • Gilt cash yields are 1-2bp lower on the day with the curve marginally bull flattening.
  • It is a similar story for bunds where the 2s30s spread has narrowed 1bp.
  • OAT yields are now 1-3bp lower on the day.
  • BTPs have marginally outperformed core EGBs with the curve 2bp flatter.
  • Amid the ongoing fallout over the Downing St party during a previous period of tightened Covid restrictions, UK PM Boris Johnson is set to face a intense backlash during today's prime minister's questions.
  • Supply this morning came from Germany (Bund, EUR1.256bn allotted) Italy (BOTs, EUR6.5bn).
  • There was little in the way of tier one European data this morning. Focus now shifts to US CPI data later today.

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