EGBs-GILTS CASH CLOSE: Core Yields Drop Alongside Oil Prices

The UK and German curves bull flattened to open the week, with periphery EGB spreads marginally wider.

• After a mixed morning session, Bund and Gilt futures jumped to session highs in the afternoon as oil prices plummeted (front Brent dropped $6%) on a WSJ report that OPEC+ was considering raising output.
• ECB Chief Economist Philip Lane told MNI that he didn't think December would mark the last rate hike, but the Governing Council would consider slowing the pace of hikes at the next meeting.
• Rate futures largely took the comments in stride.
• BTPs underperformed, with spreads widening throughout the session, accelerating toward the cash close on no particular catalyst.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 1.1bps at 2.095%, 5-Yr is down 1.7bps at 1.969%, 10-Yr is down 2.5bps at 1.989%, and 30-Yr is down 2.2bps at 1.907%.
• UK: The 2-Yr yield is up 0.9bps at 3.188%, 5-Yr is down 2bps at 3.275%, 10-Yr is down 5.5bps at 3.184%, and 30-Yr is down 8.2bps at 3.306%.
• Italian BTP spread up 3.4bps at 191.8bps / Greek up 2.6bps at 227.5bps