Grinding higher

We have seen both gilts and Bunds moving higher this morning as Treasuries stay largely flat but Eurozone peripheral spreads widen.

• The main headline of the morning concerns an update on the AZ/Oxford vaccine. There is no disclosure of the efficacy but it has been announced that it works as well in older people as it does in younger age groups. This is further promising news on the vaccine development but with the Pfizer/Moderna/Sputnik vaccines all at more advanced stages there was little market reaction to the news.
• An FT report this morning focused on Weidmann's view that market neutrality should be more important for the ECB than buying green bonds. This is being considered in the ECB's strategic review but Lagarde is thought to be leaning towards compensating for the market's failures (see our bullets at 6:57GMT).
• Looking ahead we have claims data as well as several ECB/Fed speakers.
• TY1 futures are up 0-5+ today at 138-11+ with 10y UST yields down -1.8bp at 0.853% and 2y yields down -0.3bp at 0.172%.
• Bund futures are up 0.17 today at 175.29 with 10y Bund yields down -1.6bp at -0.571% and Schatz yields unch at -0.735%.
• Gilt futures are up 0.13 today at 134.96 with 10y yields down -1.5bp at 0.320% and 2y yields down -0.1bp at -0.31%.