EGB/Gilt - Paring Earlier Losses

European government bonds traded weaker earlier in the session, before partially recovering losses. Equity performance has been mixed, while G10 currencies have broadly gained against the dollar.

• Gilts have recovered from earlier losses with the short-end now trading close to flat on the day and longer end yields 1bp higher.
• Bund yields are 1bp across much of the curve, although the very long end of the curve has started to inch above yesterday's close.
• The very long end of the OAT curve has slightly flattened with the 2s30s spread 1bp narrower.
• The BTP curve has twist flattened with the 2s30s spread trading down 2bp.
• Political pressure continues to pile on UK PM Boris Johnson following a poor performance during prime minister questions yesterday amid the ongoing fallout over the Downing St party.
• Supply this morning came from Italy (BTPs, EUR7.0bn), while Ireland and Cyprus are both issuing 10-year bonds via syndication.
• European tier one data was relatively light this morning with the only release of note being Italian industrial production which surprised higher in November (6.3% Y/Y vs 3.7%).