EGB/GILT: GDP Surprises And Digesting The ECB

Price action in European govies have been relatively contained thus far.

• There has been no follow-through from yesterday's ECB meeting, which played out largely as expected: no change in policy, but a signal of intent that further stimulus will likely be added in December.
• This morning's euro area preliminary GDP prints for the third quarter came in above expectations (Eurozone 12.7% Q/Q vs 9.6% survey, Germany 8.2% vs 7.3% survey, France 18.2% vs 15.0%, Italy 16.1% 11.1%, Spain 16.7% vs 13.5%) , but come at a time when social restrictions are being tightened across the region which risks undermining economic activity in Q4.
• Bunds traded weaker earlier in the session but have pulled back towards yesterday's close.
• The OAT curve has steepened slightly with the 2s30s spread 1bp wider.
• BTPs have trade weaker with cash yields 1-2bp higher on the day.
• Gilts trade close to unch. Last yields: 2-year -0.0623%, 5-year -0.065%, 10-year 0.2277%, 30-year 0.7666%.