EGBs-GILTS CASH CLOSE: Relentless Bull Flattening

Relentless bull flattening was the prevalent theme in the UK and German curves Tuesday as equities continued to sell off into the cash bond close (30-Yr Gilt yields dropped 7+bps). The risk-off move was resisted by BTP spreads, which tightened very slightly (though 10-Yrs ended 3+bps off tightest levels).

COVID lockdown concerns remained front-of-mind, with reports that France's Macron is considering a national lockdown, and cases across Europe mounting. Brexit talks simmering in the background too.

Closing Levels / 10-Yr Periphery EGB Spreads:

• Germany: The 2-Yr yield is down 1.7bps at -0.774%, 5-Yr is down 2.9bps at -0.802%, 10-Yr is down 3.5bps at -0.615%, and 30-Yr is down 3.4bps at -0.196%.
• UK: The 2-Yr yield is down 1.5bps at -0.049%, 5-Yr is down 2.3bps at -0.054%, 10-Yr is down 4.3bps at 0.232%, and 30-Yr is down 7.1bps at 0.78%.
• Italian BTP spread down 0.4bps at 131.5bps
• Spanish bond spread up 0.7bps at 77.3bps
• Portuguese PGB spread up 0.6bps at 74.6bps
• Greek bond spread up 4.6bps at 154.7bps