EGBs-GILTS CASH CLOSE: Heavy Supply Ends Up Well-Absorbed

The theme of Tuesday was issuance, unsurprising given the heavy auction/syndication schedule going into the day. This weighed on the space in the morning, though news that J&J's COVID vaccine rollout would be paused in the US and Europe boosted Gilts and Bunds midday London time.

• In the end, Bunds and Gilts were little changed, with periphery spreads mixed.
• Supply this morning came from the UK (Gilt , GBP1bn), Germany (Linker, E0.387bn allotted), Italy (BTPs, E7.75bn) Syndications today include: Spain 15-year bond (E6bn) Austria (dual tranche 4-/50-year issues for combined E5.75bn, and the Netherlands (0% Jan-38 DSL, E5.9bn).
• German ZEW and UK Feb GDP disappointed, but little reaction. ECB's Villeroy said that he didn't favor the bank adopting yield curve control.
• Note Slovakia today announced a 15-Yr syndication mandate. Auctions Weds include 30-Yr Gilt linker and Germany Aug-48 Bund.

Closing yields/10-Yr Spreads to Bunds:

• Germany: The 2-Yr yield is down 0.1bps at -0.702%, 5-Yr is unchanged at -0.631%, 10-Yr is up 0.1bps at -0.292%, and 30-Yr is up 0.2bps at 0.264%.
• UK: The 2-Yr yield is down 0.5bps at 0.049%, 5-Yr is down 0.5bps at 0.356%, 10-Yr is down 1bps at 0.779%, and 30-Yr is down 0.3bps at 1.307%.
• Italian BTP spread up 1.3bps at 104.1bps / Spanish spread down 0.3bps at 67.9bps