EGBs-GILTS CASH CLOSE: Bunds Give Up Thursday's Gains

German yields rose sharply to close the week as ECB dovishness was reconsidered, reversing most of Thursday's fall, with Gilts also weakening but outperforming Bunds. Trading was thinner than usual, with several US markets on holiday.

• ECB and BoE terminal rate hike pricing bounced from Thursday's lows, returning to pre-US CPI release levels.
• UK Sept GDP came in weaker than expected, but the reading was distorted by the impact of an additional bank holiday. No real surprises for the BoE.
• ECB's de Cos said the QT start date could be announced in December.
• Periphery spreads were mixed: BTPs gave back some of Thursday's spread tightening, while GGBs outperformed.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 12.7bps at 2.207%, 5-Yr is up 16bps at 2.087%, 10-Yr is up 15.1bps at 2.16%, and 30-Yr is up 11.4bps at 2.112%.
• UK: The 2-Yr yield is up 6.2bps at 3.165%, 5-Yr is up 5.8bps at 3.367%, 10-Yr is up 6.6bps at 3.358%, and 30-Yr is up 8.5bps at 3.491%.
• Italian BTP spread up 5.3bps at 204.5bps / Greek down 6.1bps at 237.5bps