EGB/Gilt: Recovering Earlier Losses

European sovereign bonds traded weaker this morning before recouping losses.

• Gilts opened lower, but have gradually recovered losses through the morning to now trade marginally below yesterday's close.
• It is a similar story for bunds, which have now traded a touch above yesterday's closing levels.
• OATs are close to unchanged on the day with the curve flat overall.
• BTP yields are <=1bp higher on the day.
• While UK wage growth was in line with expectations for November, the recorded unemployment rate came in a touch better than expected (4.1% vs 4.2% consensus) and payrolled employees grew 54k more than expected in December alongside a downward revision of 95k to the November reading.
• Supply this morning came from the UK (Gilts, GBP2.5bn), Germany (Bobl, EUR3.22bn allotted), Italy (BTP, EUR1.75bn), Spain (Letras, EUR2.08bn), Finland (RFGB, EUR995mn) and the ESM (Bills, EUR1.5bn). In addition, Belgium launched a EUR5bn Jun-32 bond with book size in excess of EUR21bn.
• The ECB's Francois Villeroy de Galhau speaks at a conference at Paris Dauphine University later today.