EGB/Gilt: Mixed Start Amid Potential Oil Import Ban

European government bonds have traded mixed this morning alongside further downside for equities. Signs over the weekened that the US is attempting to coordinate a Russian oil import ban with its allies has further dented the outlook for growth and inflation, as well as injecting fresh uncertainty over President Putin's response.

• Oil prices have surged again on the possibility of an import ban with Brent crude last seen at USD125/bbl, with spillovers to inflation markets. The EUR 5y5y forward inflation swap has edged up to 2.2925% from an intraday low of 2.0213%.
• Gilts have traded weaker with the curve bear flattening. Cash yields are up 3-6bp with the curve 2-3bp flatter.
• Bunds have firmed on the day with yields 3-5bp below the Friday close.
• Performance across the OAT curve has been uneven. Must of the curve has firmed with yields down 2-5bp, although the 10-year benchmark has weakened below the Friday close.
• BTPs have sold off with the curve bear flattening. Cash yields are up 1-5bp.
• Supply this morning came from Germany (Bubills, EUR5.077bn) and the Netherlands (DTCs, EUR2.68bn). Later today France will offer EUR4.-5.7bn of BTFs.