EGB/Gilts Offered

European bonds have sold off sharply this morning and curves have bear steepened while equities are broadly lower on the day.

• Gilts have traded weaker with cash yields 1-4bp higher and the curve 3bp steeper.
• UK labour market data was mixed. Wages inc bonuses increased 4.7% Y/Y in December vs 4.1% expected (ex bonus was 4.1% vs 4.0% survey), while 3m/3m employment fell 114k vs -30k survey. The UK's progress on vaccinations and the government's decision yesterday to publish its roadmap for exiting lockdown, have underpinned the shift in risk sentiment towards UK assets. Cable is now eyeing 1.41.
• Bunds have similarly sold off with the 2s30s spread 4bp wider on the day.
• OATs have slightly underperformed bunds. The curve is now 5b0 steeper.
• BTPs have been the worst performer in the region with yields at the long end of the curve up 7bp.
• The final January CPI print for the eurozone matched the initial estimate (0.9% Y/Y).