EGBs-GILTS CASH CLOSE: Big US Job Gains Sink European FI

A weak session developed into a rout for core European FI following a strong US nonfarm payrolls release at 1330BST, with 10Y Gilt yields rising as much as 7bp from that point (of 9bp total on the day).

• Long-end Gilts underperformed Bunds (10Y German yield only rose 3bp after payrolls) by a wide margin, though it was the opposite case at the short end.
• The afternoon's moves reversed some of the flattening in recent sessions (German 5s30s hit lowest since early Feb in the morning before closing steeper).
• Periphery spreads tightened, led by Greece (-3.3bp), as global stocks tested highs.
• BoE's Bailey didn't move the market with his comments today, and European data was limited. The only bond supply was Belgian ORI (E0.5bln).

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 1.9bps at -0.757%, 5-Yr is up 3.3bps at -0.729%, 10-Yr is up 4.1bps at -0.457%, and 30-Yr is up 4.5bps at -0.002%.
• UK: The 2-Yr yield is up 4.7bps at 0.139%, 5-Yr is up 6.3bps at 0.297%, 10-Yr is up 8.8bps at 0.612%, and 30-Yr is up 7.6bps at 1.011%.
• Italian BTP spread down 0.3bps at 102.5bps / Spanish down 0.5bps at 69.8bps