EGBs-GILTS CASH CLOSE: Bunds Reverse Early Gains

Gilts outperformed Bunds, with periphery EGB spreads narrowing Wednesday. Curves traded mixed, with the UK's bull flattening and German yields higher but mostly parallel.

• 10Y Bund yields had dipped more than 3bp by 1315GMT before reversing. No particular catalyst seen but strong US consumer confidence data helped continue the bearish afternoon trend. Yields closed just shy of the 2.316% session high.
• UK outperformance came despite unexpectedly high Nov gov't borrowing figures, which saw Gilts under pressure early.
• Periphery spreads narrowed in a mainly risk-on session.
• Italy's 2023 debt plan issued today (more here) foresees overall gross issuance of M-T/L-T securities between E310-320bln, vs E285bln in 2022
• Thursday kicks off with final UK GDP data. There is no supply and no central banks featured.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 1bps at 2.527%, 5-Yr is up 1.1bps at 2.344%, 10-Yr is up 1bps at 2.314%, and 30-Yr is up 1.7bps at 2.204%.
• UK: The 2-Yr yield is down 1.5bps at 3.668%, 5-Yr is up 0.1bps at 3.58%, 10-Yr is down 2.5bps at 3.571%, and 30-Yr is down 3.8bps at 3.854%.
• Italian BTP spread down 4.9bps at 212.3bps / Spanish down 1.8bps at 108.3bps