EGB/Gilt: Further Vaccine Disruptions

European sovereign bonds have sold off and curves have bear steepened alongside gains for equities.

• Gilts are leading the correction with casy yields 2-7bp higher and the curve 5bp steeper. The Jun-21 gilt future is making fresh intraday day lows and last traded at 126.84.
• Following yesterday's initial headline that UK Covid vaccine supplies will be squeezed in the coming weeks, reports came out this morning that an increase in demand for the AstraZeneca vaccine in India have impacted planned exports of the jab to the UK.
• Yesterday's announcement from the European Commission President Ursula Von der Leyen on the possibility of emergency vaccine controls to prevent exports outside of the bloc, continues to weigh.
• Bunds have traded weaker with the long end of the curve underperforming. The 2s30s spread is 3bp wider.
• It is a similar story for OATs where cash yields are up to 3bp higher.
• Supply this morning came from France (OATs, EUR9.5bn), Spain (Bonos/Oblis, EUR6.171bn) and Ireland (Bills, EUr750mn).