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EGBs-GILTS CASH CLOSE: Peripheries Underperform

BONDS

Periphery EGB spreads widened Wednesday as Bunds strengthened on a continued flight to safety. The UK curve was mixed, with the short end stronger but 10+ year segment slightly weaker.

  • The bigger moves Wednesday were in the currency market, with EUR and GBP weakening sharply against the USD (in accordance with the risk-off theme).
  • Greek spreads widened sharply amid a 5Y GGB tap via syndication, while BTP/Bunds had widest closing level since June 2020.
  • German inflation data takes focus Thursday.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany:

  • Germany: The 2-Yr yield is down 4.9bps at 0.1%, 5-Yr is down 4.7bps at 0.529%, 10-Yr is down 1.4bps at 0.801%, and 30-Yr is up 1.9bps at 0.974%.
  • UK: The 2-Yr yield is down 1.1bps at 1.489%, 5-Yr is down 0.2bps at 1.575%, 10-Yr is up 1.6bps at 1.812%, and 30-Yr is up 3.3bps at 1.937%.
  • Italian BTP spread up 3.2bps at 177.2bps / Greek up 5.6bps at 223.4bps

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