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Bill Supply For W/C Sep 20, 2021: Recap

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European sovereign bonds have traded this weaker with gilts significantly underperforming alongside a mixed performance for equities and FX.

  • UK labour market data for August showed the number of employees on payroll climbing above the pre-pandemic level with earnings growth running at a 8.3% Y/Y clip (above the 8.2% expected). Further signs that the labour market is heating up come from vacancies, which have pushed above 1mn for the first time on record. This contrasts with last week's data showing growth disappointing in July.
  • Gilts have sold off with cash yields 3-4bp higher and the curve a touch steeper.
  • The bund curve has bear steepened with the 2s30s spread 2bp wider on the day.
  • The OAT curve has similarly steepened by 1bp.
  • BTPs sold off earlier in the session, before recovering losses and now trading marginally above yeserday's close.
  • Supply this morning came from the UK (Gilts, GBP3.00bnP, Germany (Schatz, EUR3.908bn allotted), Italy (BTPs, EUR9.0bn), Spain (Letras, EUR1.843bn), Finland (RFTBs, EUR1.506bn) and the ESM (Bills, eur1.1bn).