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EGBs-GILTS CASH CLOSE: Rally Continues

BONDS

A busy supply schedule did little to deter European bond gains Thursday, with Bunds bull flattening and the UK curve bull steepening for the second consecutive session.

  • The German long-end once again set the tone for EGBs in general, resuming Wednesday's bullish price action.
  • Few European macro drivers today (soft US PPI was marginally positive for core Global FI), but supply was eyed: Italy, Ireland, and Cyprus (the latter two syndications) sold bonds today.
  • Periphery EGBs enjoyed a constructive session, with BTPs outperforming.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

  • Germany: The 2-Yr yield is down 1.2bps at -0.599%, 5-Yr is down 2.2bps at -0.399%, 10-Yr is down 3.1bps at -0.09%, and 30-Yr is down 4.7bps at 0.204%.
  • UK: The 2-Yr yield is down 4.6bps at 0.761%, 5-Yr is down 4.2bps at 0.936%, 10-Yr is down 3.5bps at 1.105%, and 30-Yr is down 2.7bps at 1.216%.
  • Italian BTP spread down 1.5bps at 130.7bps / Spanish down 0.9bps at 67.7bps

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