EGBs-GILTS CASH CLOSE: BTPs Hit March Wides To Bunds

The German and UK curves twist steepened modestly Tuesday, with core yields closing within 1bp of Monday's close after several intraday changes in direction.

• Yields opened the session wider in a continuation of the "higher for longer" rates theme, but fell sharply alongside weakness in oil prices, and a more sizeable-than-expected cut in Germany's Q4 issuance plan.
• Meanwhile, BTP spreads closed at post-March wides, with another report (from Bloomberg) pointing to a sizeable upward revision in the 2024 fiscal deficit target to be unveiled Wednesday by the Italian coalition gov't.
• Between Italy and broader risk-off (Eurostoxx down nearly 1%), other periphery spreads were dragged wider.
• Gilts were largely a bystander to broader events, though relatively weak demand details at today's auction was of some note.
• While there is some data Weds morning (eg German and French consumer confidence), attention is still firmly on the Eurozone September flash inflation data out Thursday and Friday - MNI's preview went out today (PDF link).

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.6bps at 3.231%, 5-Yr is up 0.6bps at 2.771%, 10-Yr is up 1bps at 2.808%, and 30-Yr is up 0.6bps at 3.004%.
• UK: The 2-Yr yield is down 0.8bps at 4.808%, 5-Yr is down 0.3bps at 4.398%, 10-Yr is up 0.3bps at 4.326%, and 30-Yr is up 0.9bps at 4.805%.
• Italian BTP spread up 7bps at 193.4bps / Spanish up 2.5bps at 109.7bps