EGB/Gilt: The highlight of the day.....>

BOND SUMMARY: EGB/Gilt: The highlight of the day so far has been the UK 10-year

syndication with a much larger than expected GBP12bln allotted from an order

book that closed in excess of GBP82bln. This is the first time the DMO has

issued a medium-dated conventional gilt by syndication. This follows up large

syndication deals in Italy and Spain over the past few weeks. Germany come to

the table today to launch a 7-year Bund in a successful auction (one of the

other innovations of the extra Covid-releated issuance). Bill issuance has also

been very heavy today with Spain, Italy, Belgium, Finland and the ESM issuing a

combined total of EUR19.2bln today.

- Bunds are underperforming other safe haven assets as concerns about the German

Constitutional Court's ruling on the ability of the ECB to enact its policy as

it sees fit. In spite of this, peripheral spreads are a little tighter on the

day. Gilts are a touch lower on the day.

- Bund futures are down -0.42 today at 173.11 with 10y Bund yields up 1.7bp at

-0.496% and Schatz yields up 2.0bp at -0.737%. Gilt futures are down -0.06 today

at 137.30 with 10y yields unch at 0.268% and 2y yields down -0.1bp at -0.1%.