Eurozone peripherals outperform, led by BTPs

Core bonds are performing well this morning with Bunds leading the moves higher.

• Core bond markets remain within yesterday's ranges but have been on the front foot since the European open this morning. The real movers, however, have been Eurozone peripherals. 10-year BTP-Bund spreads are 3.0bp tighter on the day and Portuguese spreads 2.2bp tighter. 10-year BTP yields are approaching the record lows seen in mid-December.
• Economic data on the whole has been better than expeted with French and German IP, German trade and Eurozone unemployment all better than expected.
• The newsflow this morning has largely focused on whether President Trump will remain in office to see out his full term, a study by the University of Texas that shows the Pfizer vaccine has given promising results against the UK and South African Covid-19 variants. The latter story is helping equities and risk in general rally.
• TY1 futures are down -0-1+ today at 136-29 with 10y UST yields down -0.4bp at 1.077% and 2y yields down -0.2bp at 0.138%.
• Bund futures are up 0.22 today at 177.47 with 10y Bund yields down -0.6bp at -0.531% and Schatz yields down -0.4bp at -0.714%.
• Gilt futures are up 0.22 today at 134.57 with 10y yields down -0.9bp at 0.274% and 2y yields unch at -0.143%.