EGBs-GILTS CASH CLOSE: Gas Supply Risks See Bunds Rally

Bunds easily outperformed Gilts Tuesday amid a broader move into safe havens, and ahead of the US Federal Reserve meeting Wednesday.

• In a fairly light session for newsflow and speakers, most focus was on the EU reaching a deal to reduce gas consumption amid anticipation of Russian supply being choked off.
• Bund yields hit a 2-month low. Gilts were stronger too but underperformed with modest twist flattening as 2Y yields ticked higher.
• BTP spreads had their joint-highest close since June 14, with one pollster flagging a potential landslide win for Italian right-wing parties in September.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany:

• Germany: The 2-Yr yield is down 6.2bps at 0.348%, 5-Yr is down 9.4bps at 0.662%, 10-Yr is down 9.3bps at 0.925%, and 30-Yr is down 7.9bps at 1.2%.
• UK: The 2-Yr yield is up 0.2bps at 1.829%, 5-Yr is down 0.9bps at 1.685%, 10-Yr is down 2bps at 1.917%, and 30-Yr is down 1.7bps at 2.476%.
• Italian BTP spread up 5.3bps at 232.5bps / Spanish down 1.8bps at 118.7bps