Market awaits progress on EU Budget and Brexit for next direction

It has been a rather range-bound afternoon for EGBs with Bunds holding on to the gains seen this morning and peripheral spreads remaining wider but not really showing much movement since midday either. Bunds have remained in a 20 tick range over the past six hours now.

• There continues to be focus on the EU Budget and on Brexit. There appears to be no real progress being made on either with Poland and Hungary digging in their heels and refusing to sign off on the budget while disbursements are linked to EU values. While on Brexit, talks have been suspended for a "short period" after one of the EU's negotiating team has tested positive for Covid-19.
• Bund futures are up 0.24 today at 175.36 with 10y Bund yields down -2.0bp at -0.575% and Schatz yields down -0.1bp at -0.736%.
• BTP futures are up 0.02 today at 150.86 with 10y yields down -1.4bp at 0.640% and 2y yields down -1.2bp at -0.395%.
• OAT futures are up 0.20 today at 170.06 with 10y yields down -1.9bp at -0.343% and 2y yields unch at -0.682%.