EGB/Gilt: Pushing Higher

European government bonds have turned bid this morning with gilts leading the charge.

• Gilt cash yields are now 5-6bp lower on the day with the curve bull steepening.
• The bund curve, meanwhile, has bull flattened. The 2s30s spread has narrowed 2bp.
• It is a similar story for OATs where yields are 1-3bp lower with the longer end of the curve outperforming.
• BTP yields are down 2-4bp with the curve ~1bp steeper.
• UK PM Boris Johnson announced 'Plan B' social restrictions yesterday evening with workers now being told to WFH where possible. At the same time, Johnson is coming under increasing pressure within his own party following allegations that No. 10 staff held a party last Christmas that violated the government's own Covid rules.
• Aside from Italy's EUR2.25bn exchange auction, there was no European supply this morning.
• The European data calendar has similarly been light with the only release of note being German trade trade data (October trade surplus: EUR12.8bn vs EUR14.3bn expected). There were also no scheduled policy speakers this morning.
• Focus shifts to US claims data later today.