Markets have pivoted to risk-on mode...>

BOND SUMMARY: Markets have pivoted to risk-on mode this morning with core

sovereign curves bear flattening, EGB periphery-core spreads narrowing, equities

rallying and oil inching higher. 

- The shift comes on the back of the Fed's plans to purchase corporate bonds and

reports that the Trump administration is working on a USD1trn infrastructure

spending plan. 

- USTs have sold off with the longer end underperforming. The 2s30s spread is

5bp higher on the day.

- Data released earlier this morning showed a lower-than-expected UK

unemployment rate for April and modest job gains (vs expectations of 110k

losses). However, these figures are likely to be artificially supported by

furloughed workers being classed as 'employed'. Gilts have sold off this morning

with cash yields 1-3bp higher.

- Bunds have similarly traded weaker with yields 1-3bp lower and the longer-end

underperforming.

- BTPs have rallied sharply the belly marginally outperforming.