EGB/GILT: Markets have been a little...>

BOND SUMMARY: EGB/GILT: Markets have been a little choppy this morning with

coronavirus the main driver once again. Italy now has 374 confirmed cases and 12

deaths, with 4 of the infected children. After moving lower in the Asian

session, higher on the European open we have since moved back and now aren't a

million miles away from yesterday's closing prices.

- Gilts remain the outperformers. Headlines that some Budget measures will have

to be delayed to balance the books and meet the fiscal rules have let to some

reduced expectations of the stimulatory effect of the Budget next month. Gilts

had avoided breaching their January highs

yesterday, despite Bunds and Treasuries breaking higher, but today the 0.50%

yield support gave way with UK 10y yields hitting their lowest levels since Oct.

We have since moved back to yields of 0.51% at the time of writing.

- Bund futures are down -0.23 today at 175.79 with 10y Bund yields up 1.4bp at

-0.500% and Schatz yields down -0.8bp at -0.705%.

- Bund futures are down -0.23 today at 175.79 with 10y Bund yields up 1.4bp at

-0.500% and Schatz yields down -0.8bp at -0.705%.