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EGBs-GILTS CASH CLOSE: Bund Auction, UK Inflation Taken In Stride


A promising day for the long end following a very strong German 30-Yr auction this morning has turned somewhat sour, esp in the Gilt curve. By the close, the long-end had underperfomed, while the short-end and belly had outperformed. 10-Yr Gilt yields backed up nearly 5bps from the midday lows.

Periphery spreads came back from widest levels as global equities / risk appetite turned higher and the Euro/Pound faded earlier gains. Apart from the Bund auction and the higher-than-expected UK inflation data out prior to the market open, there were few headline catalysts (and indeed neither of those had much of a lasting market impact at all).

Closing levels:

  • Germany: The 2-Yr yield is down 1.1bps at -0.669%, 5-Yr is down 1.3bps at -0.671%, 10-Yr is down 0.9bps at -0.472%, and 30-Yr is down 0.9bps at -0.035%.
  • UK: The 2-Yr yield is up 1.7bps at -0.025%, 5-Yr is up 1.6bps at -0.024%, 10-Yr is up 1.7bps at 0.236%, and 30-Yr is up 3.6bps at 0.814%.

10-Yr Periphery EGB Spreads:

  • Italian BTP spread down 0.4bps at 138.5bps
  • Spanish bond spread down 0.9bps at 76.4bps
  • Portuguese PGB spread down 0.3bps at 80.2bps
  • Greek bond spread up 0.9bps at 156.6bps

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