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EGB/GILT - Pause For Thought


The risk-on rebound following the Moderna Covid vaccine announcement yesterday has subsided somewhat this morning with equities inching lower and European govies trading firmer.

  • Gilts have made incremental gains with yields up to 2bp lower on the day and the curve marginally bull flattening.
  • Bunds trade close to unch on the day. Last yields: 2-year -0.7305%, 5-year -0.7398%, 10-year -0.5500%, 30-year -0.1450%.
  • OATs have firmed with cash yields within 1bp of yesterday's close.
  • BTPs trade broadly in line with core EGBs.
  • Supply this morning came from the UK (Gilts, GBP5.25bn), Germany (Schatz, E4.125bn allotted), Spain (Letras, E1.02bn) and the ESM (Bills, E2bn).
  • The European data calendar was light this morning. Norwegian Q3 GDP printed in line with expectations at 5.2% Q/Q.

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