EGB/Gilt: Markets have remained on a...>

BOND SUMMARY: EGB/Gilt: Markets have remained on a risk-on setting through the

morning with core European govies selling off, periphery-core spreads narrowing

and equities rallying.

- Gilts have sold off with the Sep-20 future trading at 136.90, 10 ticks off the

day's low.

- Bunds remain bid with cash yields 1-3bp lower and the curve bear steepening.

- OATs trade weaker with yields marginally above yesterday's close.

- BTPs have rallied with the belly of the curve outperforming. Yields are 3-6bp

lower on the day.

- Supply this morning came from the UK (gilts, GBP5.0bn), Spain (letras,

EUR3.06bn) and the ESM (EUR2.0bn).

- Data published earlier this morning showed a lower than expected unemployment

rate for the UK in April, as well as an additional 6k jobs vs expectations of

110k losses. However, with workers on furlough classed as 'employed', some of

the labour market data may be artificially supported and could deteriorate once

government support is tapered.