EGBs-GILTS CASH CLOSE:  Core Selloff Pauses; BTPs Fade

In direct contrast with Tuesday, Wednesday saw Gilt and Bund yields close at/near session lows, with global safe havens in favor as equities retreated and the US dollar strengthened. The German and UK curves bull flattened. Against that backdrop, BTP spreads headed to widest levels to Bunds in four sessions.

• Pre-open, UK CPI pushed higher in January and came in above expectations.
• Germany sold 30Yr Bund (E1.2bn allotted) at a positive yield for the first time since June; UK sold EGB2.5bn of Jul-35 Gilt. Toward the end of the session, BOE's Ramsden noted the BOE has room to increase QE further.
• Thursday's data fairly thin, including Eurozone consumer confidence. Meanwhile, the ECB publishes its policy meeting account, while BOE's Saunders speaks on a webinar. Spain and France hold auctions.

Closing yields/10-Yr Spreads to Bunds:

• Germany: The 2-Yr yield is down 0.8bps at -0.698%, 5-Yr is down 1.6bps at -0.65%, 10-Yr is down 2bps at -0.368%, and 30-Yr is down 2.6bps at 0.137%.
• UK: The 2-Yr yield is down 0.7bps at -0.044%, 5-Yr is down 2bps at 0.107%, 10-Yr is down 4.9bps at 0.572%, and 30-Yr is down 6.9bps at 1.154%.
• Italian BTP spread up 3.4bps at 95.4bps / Spanish spread up 1.4bps at 65.6bps