BONDS: EGBs-GILTS CASH CLOSE: Bunds Outperform Ahead Of Inflation Data

Bunds outperformed global peers Wednesday ahead of the latest round of Eurozone inflation data.

• Core FI enjoyed a modest rally in early trade, helped in part by weaker crude oil prices. 
• Eurozone money and lending data pointed to a continuation of soft credit dynamics.
• Yields bounced back from the session lows set in early afternoon, however, amid hedging activity as EUR issuance priced.
• Gilt yields were little changed, with no market-moving data, and a panel appearance by BoE's Mann produced no headlines.
• Periphery EGB spreads closed slightly wider for the most part.
• The schedule gets busier Thursday with an appearance by ECB's Lane, and the August Eurozone inflation data round kicking off with Spain and Germany - MNI's preview is here (PDF).

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 1.9bps at 2.385%, 5-Yr is down 2.1bps at 2.165%, 10-Yr is down 2.7bps at 2.261%, and 30-Yr is down 3.4bps at 2.503%.
• UK: The 2-Yr yield is up 0.5bps at 4.114%, 5-Yr is up 0.3bps at 3.914%, 10-Yr is up 0.3bps at 4.001%, and 30-Yr is up 0.9bps at 4.519%.
• Italian BTP spread up 0.6bps at 138.6bps / Spanish up 1.3bps at 83.1bps