EGB/Gilt: Safe Haven Flows

European government bonds have rallied sharply amid the Russian invasion of Ukraine. Gilts and bunds have been the outperformers in the region.

• Equities have posted losses across the board while the dollar is making gains across G10 FX with the exception of USDJPY.
• Western leaders have threatened even more severe sanctions on Moscow, but there is little sign of a near-term reprieve.
• Gilt yields are now 9-10bp lower with the curve close to flat overall.
• Bund yields are similarly 8-10bp lower.
• OATs have marginally underperformed bunds with yields pushing down 6-8bp.
• BTPs have underperformed core EGBs with yields down 4-5bp on the day.
• Supply this morning came from Italy (BOT, EUR5.5bn).
• There was no tier one European data this morning. Focus shifts to US GDP and jobless claims later today.