EGBs-GILTS CASH CLOSE: Big Rally Alongside US Tsys

Bunds and Gilts enjoyed a strong Thursday, with yields steadily falling all session and closing just off the lows. While both curves bull flattened, and German yields saw their biggest fall since the beginning of the month, the UK outperformed.

• Bunds and Gilts moving in line with US Tsys which are on track for their strongest rally since late Feb. As such it wasn't a European catalyst for the move - though worth noting large EGB redemptions today (E29.3bln).
• BTP spreads narrowed sharply despite the gov't announcing a projected 2021 budget deficit of 11.8% of GDP, with debt rising to a 101 year high as a % of GDP.
• Ireland sold E3.5bln of 20-Yr IGB via syndication.

Closing yields/10-Yr Spreads to Bunds:

• Germany: The 2-Yr yield is down 1.1bps at -0.699%, 5-Yr is down 2.4bps at -0.627%, 10-Yr is down 3.2bps at -0.29%, and 30-Yr is down 2.8bps at 0.267%.
• UK: The 2-Yr yield is down 2.2bps at 0.039%, 5-Yr is down 4.6bps at 0.321%, 10-Yr is down 6.7bps at 0.737%, and 30-Yr is down 7.6bps at 1.269%.
• Italian BTP spread down 3bps at 102.1bps / Spanish down 0.9bps at 66.5bps