EGB/Gilt: Gilts Edge Higher; Pressure Mounts On PM

Gilts have rallied through the morning while performance for EGBs has been somewhat mixed. Equities are broadly higher while the US dollar is on the back foot against G10 FX

• Gilt cash yields are 1-3bp lower on the day with the curve bull flattening.
• UK PM Boris Johnson faces mounting pressure to publish the full Gray report into the Downing Street lockdown parties, fueling speculation of further revelations that could undermine his position.
• Bunds have lacked clear direction so far and broadly trade a touch above yesterday's close.
• It is a s similar story for OATs, which now trade close to flat on the day.
• BTPs have oscillated through the morning with yields now 1-2bp above yesterday's close.
• Final manufacturing PMI data for January was higher than initially expected for the UK (57.3 vs 56.9) and Spain (56.2 vs 56.0), and a touch lower for Germany (59.8 vs 60.5), Italy (58.3 vs 61.2) and the broader eurozone (58.7 vs 59.0)
• Elsewhere, French preliminary CPI data for January surprised higher (3.3% Y/Y vs 2.9% expected), while the Nationwide house price index for the UK increased by 11.2% Y/Y in January vs 10.9% expected.
• Supply this morning came from Germany (Schatz, Eur4.846bn allotted), Belgium (TC's, EUR1.16bn) and the ESM (Bills, EUR1.5bn).