EGBs-GILTS CASH CLOSE: Gilts Easily Outperform Pre-BoE/ECB

Gilts outperformed in a bull flattening motion with the German curve bear flattening Wednesday, ahead of key central bank meetings.

• Higher-than-expected Eurozone and Italian Jan inflation sent Bunds to session lows, and after a brief bounce, resumed heading lower until mid-afternoon.
• German 5s30s closed at flattest since March 2020.
• Bunds and Gilts rallied in the final few hours of cash trade on very weak US ADP private payrolls data and news that the US was deploying more troops in eastern Europe.
• Gilts easily outperformed though. Some degree of position squaring ahead of highly-anticipated BoE and ECB decisions Thursday as well - see our website or contact us for our previews.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 1.2bps at -0.458%, 5-Yr is up 2.2bps at -0.18%, 10-Yr is up 0.3bps at 0.04%, and 30-Yr is down 2.6bps at 0.289%.
• UK: The 2-Yr yield is down 3.2bps at 1.029%, 5-Yr is down 2.8bps at 1.108%, 10-Yr is down 4.3bps at 1.257%, and 30-Yr is down 6.6bps at 1.361%.
• Italian BTP spread up 1.4bps at 139bps / Spanish up 0.4bps at 74.4bps