EGBs/GILTs: The spike in Coronavirus...>

BOND SUMMARY: EGBs/GILTs: The spike in Coronavirus cases and deaths has

underpinned the risk-off tone in European govvies this morning.

- The UK cabinet reshuffle continues to rumble on. Business Secretary Andrea

Leadsom and housing minister Esther McVey were among the early casualties.

Despite causing a stir among Tory grassroots recently be hinting at the

possibility of a 'mansion tax' and reduction in pension tax relief, Chancellor

of the Exchequer Sajid Javid is expected to remain in his post. 

- The gilt curve has bull steepened with the 2s10s spread 2bp narrower. 

- Bund yields are 1-3bp lower on the day. Current yield levels: 2-year -0.650%,

5-year -0.612%, 10-year -0.400%, 30-year 0.111%.

- There was E5.0bln in EGB supply from two Italian issues: 0.05% Jan-23 BTP and

the 0.85% Jan-27 BTP

- BTPs have outperformed. There has been decent demand at the long-end with

yields @ >15-year maturity down 6bp.