EGBs-GILTS CASH CLOSE: End-Of-Day Surprise Pushes Yields Higher

Bund and Gilt yields had been drifting quietly lower until the very end of the session (and week) when news came that US Pres Trump had raised the size of the White House's fiscal stimulus offer to House Democrats, boosting risk appetite and pushing core FI yields on session highs.

UK and German curves bull flattened on the session, but the stars were undoubtedly periphery bonds, with Italian and Spanish yields touching all-time/multi-month lows. Closing levels:

• Germany: The 2-Yr yield is down 0.9bps at -0.718%, 5-Yr is down 1.7bps at -0.737%, 10-Yr is down 1.7bps at -0.54%, and 30-Yr is down 1.6bps at -0.111%.
• UK: The 2-Yr yield is down 0.6bps at -0.027%, 5-Yr is down 0.8bps at -0.036%, 10-Yr is down 1.9bps at 0.27%, and 30-Yr is down 1.9bps at 0.846%.

10-Yr Periphery EGB Spreads:

• Italian BTP spread down 2.7bps at 125.5bps
• Spanish bond spread down 2bps at 70.4bps
• Portuguese PGB spread down 1.2bps at 71.2bps
• Greek bond spread down 0.6bps at 141.1bps