EGBs-GILTS CASH CLOSE: BTPs Unfazed By Syndication Announcement

Gilt and Bund yields headed down over the course of the session after a jump at the cash open, despite broad strength for equities. Speculation over a UK-EU "no deal" Brexit helped keep Gilts bid for most of the day.

BTPs took centre stage in mid-afternoon on the announcement of a new 20-Yr issue via syndication, with the widening impact on spreads proving only brief (perhaps because the net supply impact was muted with Thursday's long-term auction issuance simultaneously cancelled).

Another fairly quiet day on the data/speaker calendar Tuesday (final Eurozone Q2 GDP out), with most attention being on the ECB decision Thursday. Closing levels:

• Germany: The 2-Yr yield is down 0.1bps at -0.701%, 5-Yr is up 0.3bps at -0.689%, 10-Yr is up 0.9bps at -0.463%, and 30-Yr is up 2.1bps at -0.007%.
• UK: The 2-Yr yield is down 1.5bps at -0.091%, 5-Yr is down 2.1bps at -0.056%, 10-Yr is down 1.5bps at 0.248%, and 30-Yr is down 1.3bps at 0.823%.

10-Yr Periphery EGB Spreads:

• Italian BTP spread up 2.1bps at 150.9bps
• Spanish bond spread down 0.9bps at 81.5bps
• Portuguese PGB spread down 0.3bps at 84.2bps
• Greek bond spread up 0.9bps at 162.1bps