EGBs-GILTS CASH CLOSE: Gilts And Bunds Strengthen Into The Weekend

Bunds and Gilts rallied Friday afternoon, reversing earlier weakness. The catalysts were a combination of position squaring ahead of the weekend, and the usual conflicting Ukraine-Russia headlines.

• In particular, core FI sold off in the late London morning as headlines emerged of Russia's Putin signalling "positive shifts" in talks with Kiev, but by the end of the day Ukraine Foreign Minister Kuleba said he didn't see such progress.
• Earlier in the session, a parade of ECB speakers from doves to hawks gave their interpretation of Thursday's decision, with "optionality" emphasised.
• The German curve bull flattened; UK bull steepened. Periphery spreads were mixed (Italy outperformed, reversing some of Thursday's sharp sell-off).

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 2.6bps at -0.407%, 5-Yr is down 0.8bps at -0.01%, 10-Yr is down 2.5bps at 0.249%, and 30-Yr is down 3.9bps at 0.412%.
• UK: The 2-Yr yield is down 3.3bps at 1.318%, 5-Yr is down 3bps at 1.273%, 10-Yr is down 3.2bps at 1.491%, and 30-Yr is down 2.9bps at 1.666%.
• Italian BTP spread down 2.8bps at 160.1bps / Greek up 5.2bps at 233.8bps