Steady Gains On Thanksgiving Thursday

With U.S. markets closed for Thanksgiving holidays, core FI on both sides of the Atlantic (futures in the case of US Tsys) saw steady gains albeit on predictably light volumes.

• The European rally accelerated in the afternoon following comments by ECB's Lane and release of the October Governing Council meeting accounts which were consistent with further easing in December. Cash curves flattened, with Gilts outperforming Bunds.
• Periphery EGBs had a strong day - Portugal 10s touching negative yielding territory - but spreads finished slightly wider as Bunds rallied.
• Very little on the agenda Friday in the U.S. with a half day for market trading. In Europe we get ECB's Panetta and Schnabel speaking, Italian bond supply, and French flash Nov inflation data.

• Dec Bund futures (RX) up 22 ticks at 175.55 (L: 175.16 / H: 175.57)
• Mar Gilt futures (G) up 35 ticks at 134.52 (L: 134.07 / H: 134.56)
• Dec U.S. 10-Yr futures (TY) up 6/32 at 138-14.5 (L: 138-07.5 / H: 138-14.5)
• Italy / German 10-Yr spread 0.6bps wider at 118.9bps