EGBs-GILTS CASH CLOSE: Afternoon Reversal

German cash yields ended Tuesday's session lower, but well off the session's lowest levels, while UK yields fully reversed higher after a late afternoon correction.

• Among the notable moves: Schatz closed 2+bps lower, back to Feb levels - one of the biggest single-day moves of the past year. 10Y Gilts traded in a 6.8bp range (briefly setting a fresh post-Feb low 0.497% before closing at 0.564%).
• Tough to pin the moves on fundamentals - some giveback was inevitable given the magnitude of the yield drop, particularly as U.S. stocks rallied hard in the afternoon, forcing a reconsideration of the risk-off/economic slowdown narrative (however brief).
• Periphery spreads finished well off wides, with BTP 10s even tightening.
• Attention turns to the ECB meeting Thursday (our preview went out today).

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 2.3bps at -0.714%, 5-Yr is down 3.2bps at -0.688%, 10-Yr is down 2.4bps at -0.41%, and 30-Yr is down 3bps at 0.058%.
• UK: The 2-Yr yield is up 1.2bps at 0.093%, 5-Yr is up 0.6bps at 0.282%, 10-Yr is up 0.4bps at 0.564%, and 30-Yr is down 2.1bps at 1.01%.
• Italian BTP spread down 0.3bps at 109.6bps / Spanish up 0.8bps at 67.1bps