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EGBs-GILTS CASH CLOSE: Brexit Deal Hopes Sink Gilt Long-End

BONDS

Gilts weakened over the session with bear steepening as Brexit deal optimism brightened (UK and EU to intensify talks), shrugging off late equity weakness. Bund yields ended down on the day but well off session lows.

  • Peripheries largely followed supply news: GGB spreads widened after EUR2bln syndicated 15-year tap, while BTPs widened after the MEF announced a syndication for new 30-year BTP.

Closing Levels / 10-Yr Periphery EGB Spreads:

  • Germany: The 2-Yr yield is up 0.8bps at -0.773%, 5-Yr is up 1.4bps at -0.788%, 10-Yr is up 1.8bps at -0.588%, and 30-Yr is up 2.1bps at -0.174%.
  • UK: The 2-Yr yield is up 1.7bps at -0.048%, 5-Yr is up 3.3bps at -0.05%, 10-Yr is up 5.5bps at 0.242%, and 30-Yr is up 6.8bps at 0.81%.
  • Italian BTP spread up 3.6bps at 137bps
  • Spanish bond spread up 0.3bps at 79.2bps
  • Portuguese PGB spread up 0.4bps at 77.2bps
  • Greek bond spread up 4.8bps at 150.5bps

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