EGB/Gilt: Third Wave Fears

European sovereign bonds have rallied this morning and curves have bull flattened alongside losses for equities.

• Gilt yields are 2-5bp lower with the curve 2bp flatter.
• The long end of the German curve is similarly outperforming with the 2s30s spread 3bp narrower.
• BTPs have trade broadly in line with core EGBs. Cash yields are 1-5bp lower on the day.
• EU member states are expected to resume using the AstraZeneca Covid jab after the EMA ruled in its favour. The move comes amid rising concern about the third wave and slow progress on vaccinations.
• Reports have come out indicating a Scottish parliamentary committee has ruled that SNP leader Nicola Sturgeon misled parliament. While a formal inquiry conducted by an independent lawyer (James Hamilton) is still ongoing, pressure on Sturgeon to resign continues to mount.