EGB/Gilt: Risk Sentiment Takes Further Hit Following Ukraine Nuclear Plant Fire

European bonds have rallied this morning alongside a sharp sell off in stocks.

• Russian forces are reported to have seized control of Ukraine's largest nuclear power plant, which previously caught fire after being fired upon. The latest development shines a light on the myriad and severe risks, both internal and external, of Russia's military invasion.
• Gilts have lacked firmed direction this morning and now trade slightly above yesterday's close. Cash yields are 2-3bp lower.
• Bunds opened higher and have made gains through the morning with yields now 5-6bp lower on the day.
• The OAT curve has bull steepened with the 2s30s spread widening 3bp.
• BTPs have firmed across the curve with yields down 2-3bp.
• French industrial production performed better than expected in January (1.6% M/M vs 0.5% expected, -1.5% Y/Y vs -3.2% expected).
• Supply this morning came from the UK (UKTBs, GBP2bn).