EGB/GILT: The market theme is..........>

BOND SUMMARY: EGB/GILT: The market theme is distinctly risk-off this morning

with the US dollar on the front foot, equities sliding, oil edging lower, core

EGBs firming and periphery-core spreads widening slightly. 

- Renewed concerns about the spread of coronavirus in some countries appears to

be behind the deterioration in risk sentiment. While Europe is persevering with

a gradual easing of lockdown restrictions, focus has shifted to the Americas

where the virus is still gaining ground. The US yesterday recorded its largest

daily increase in cases for 2 months.

- European supply this morning came from the UK (Gilts, GBP4.75bn) and Germany

(Bund, EUR2.13bn).

- The Sep-20 gilt future trades at 137.03, up from the morning low of 136.88 and

near the middle of the day's range.

- Bunds firmed through the morning and have pulled back over the last hour with

yields now close to unch on the day.

- BTPs have traded weaker with cash yields 1-2bp higher across the curve and

belly marginally underperforming.