EGB/Gilt: Risk Off Buying

European government bonds have rallied this morning alongside a broad sell off in equities and some downside for oil.

• Gilts opened higher and have managed to hold on to most of the early gains. Cash yields are 1-3bp lower with the belly of the curve marginally outperforming on the day.
• Bunds have outperformed gilts particularly at the longer end. Yields are 2-4bp lower with the curve 2bp flatter.
• The OAT curve has similarly bull flattened with the 2s30s spread narrowing 2bp.
• BTPs have slightly underperformed core EGBs with yields now down 1-2bp.
• UK retail sales data missed by a wide margin in December with the Ex Auto series falling 3.0% Y/Y vs + 1.1% Y/Y consensus.
• Supply this morning came from the UK (UKTBs, GBP2bn),
• The ECBs Christine Lagarde is due to speak later today on a panel concerning the global economic outlook at an event organised by the World Economic Forum. The BoE's Chartherine Mann is also scheduled to speak about the economic outlook.