Gilts outperformed Bunds slightly Friday, though both instruments finished the week relatively flat.

• The session started with a constructive tone, with core EGBs/Gilts aided by an uptick in US Treasuries overnight. UK GDP data was a little softer than expected but didn't have much tangible  impact.
• EGBs weakened to the session's worst levels in afternoon trade. The retracement came as TTF gas prices hit the highest levels in a year after Austria's OMV confirms Russia's Gazprom is set to suspend deliveries on November 16.
• While they recovered, aided by a down-leg in equities, EGBs would underperform Gilts on the day. The German curve bear flattened, with the UK's bull steepening. Gilt yields closed the week modestly higher, with Bund yields modestly lower.
• Periphery EGB spreads closed mostly tighter, with 10Y BTPs closing within 120bp of Bunds.  
• ECB's Cipollone was typically dovish, commenting that Q3 Euro GDP may have been flattered by Paris Olympics effects.
• Next week's schedule is highlighted by November flash PMIs, with UK CPI hitting next Wednesday.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 2bps at 2.122%, 5-Yr is up 0.8bps at 2.176%, 10-Yr is up 1.5bps at 2.356%, and 30-Yr is up 0.8bps at 2.574%.
• UK: The 2-Yr yield is down 2.4bps at 4.399%, 5-Yr is down 1.7bps at 4.328%, 10-Yr is down 1.2bps at 4.471%, and 30-Yr is up 0.5bps at 4.924%.
• Italian BTP spread down 0.6bps at 119.8bps  / Spanish down 0.6bps at 70.1bps