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EGBs-GILTS CASH CLOSE: Back-And-Forth On UK-EU Headlines

BONDS

Bunds gained and Gilt yields came off highs on a day buffeted by political developments: mainly back-and-forth headlines on progress (or lack thereof) on UK-EU trade negotiations. In the end, we saw the UK curve steepen once again, and BTP spreads tighten sharply.

  • MNI's interview with ECB's de Guindos published today pointed to the potential for further easing to be considered this year (contact sales@marketnews.com for full story). Supply this morning (Spain and France), and Sep PMI data, passed uneventfully.

Closing levels:

  • Germany: The 2-Yr yield is down 0.6bps at -0.707%, 5-Yr is down 1.1bps at -0.721%, 10-Yr is down 1.4bps at -0.536%, and 30-Yr is down 1.2bps at -0.106%.
  • UK: The 2-Yr yield is down 2.1bps at -0.044%, 5-Yr is down 0.9bps at -0.065%, 10-Yr is up 0.5bps at 0.234%, and 30-Yr is up 1.8bps at 0.8%.

10-Yr Periphery EGB Spreads:

  • Italian BTP spread down 3.1bps at 135.7bps
  • Spanish bond spread down 0.2bps at 76.8bps
  • Portuguese PGB spread down 0.2bps at 78.3bps
  • Greek bond spread up 0.7bps at 155.5bps

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