EGBs-GILTS CASH CLOSE: Further Gains To Cap Dovish Central Bank Week

Gilts and Bunds completed a strong week with a 5th consecutive session of gains Friday, as multiple dovish central bank developments buoyed global core FI.

• Though there were few market-moving developments on the day, Friday's positive tone was attributed to multiple dovish-leaning central bank results (BoJ, SNB, Fed, BoE) earlier in the week.
• The rally extended sharply around midday, with Bund yields' fall through the Mar 14 low of 2.355% rippling through to UK and US markets. From a futures perspective, Gilt tested but failed to break through psychological 100.00 level, with 99.91/100.37 remaining key S/T resistance.
• German IFO and UK retail sales data were each above-consensus, but didn't have much market impact. ECB/Bundesbank's Nagel said at an MNI event that "if I were to put it into probabilities - June has a higher probability than April" for the first ECB rate cut.
• Periphery EGB spreads closed wider. Note expected ratings reviews after hours Friday (Fitch on Portugal, Scope on Spain), against a backdrop of recent ratings upgrades (S&P on Portugal) helping periphery EGB spreads compress.
• Next week's highlights include the beginning of the March Eurozone flash inflation round (Spain, France, Italy).

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 4.8bps at 2.827%, 5-Yr is down 7.1bps at 2.334%, 10-Yr is down 8.1bps at 2.324%, and 30-Yr is down 8.4bps at 2.494%.
• UK: The 2-Yr yield is down 5.4bps at 4.124%, 5-Yr is down 6.1bps at 3.817%, 10-Yr is down 6.5bps at 3.93%, and 30-Yr is down 4.6bps at 4.447%.
• Italian BTP spread up 4.9bps at 131.9bps / Portuguese PGB spread up 3.3bps at 66.9bps