EGBs-GILTS CASH CLOSE: Gilts Easily Outperform In A Very Busy Session

A very busy session, with Gilt yields ultimately settling lower and Bund yields higher.

• We opened on a bullish note with Wednesday's Brexit talks having gone poorly and bringing a 'no deal' outcome clearly into focus. Gilts rallied at the open, and outperformed all day.
• But the mood turned more hawkish as the ECB decision and press conference were seen to disappoint dovish expectations. Bunds sold off in a bear flattening move with Schatz underperforming, BTP spreads initially widened but came back in.
• Friday sees 2-day European summit continue, with BOE financial stability report published at 0700GMT. Speakers include ECB's Holzmann and de Cos. Light data schedule though (mostly final Eurozone CPIs).

Closing Levels / 10-Yr Periphery EGB Spreads:

• Germany: The 2-Yr yield is up 0.8bps at -0.766%, 5-Yr is up 0.6bps at -0.787%, 10-Yr is up 0.2bps at -0.603%, and 30-Yr is down 0.7bps at -0.186%.
• UK: The 2-Yr yield is down 3.5bps at -0.115%, 5-Yr is down 4.3bps at -0.083%, 10-Yr is down 6bps at 0.201%, and 30-Yr is down 6.4bps at 0.744%.
• Italian BTP spread down 2.2bps at 116.5bps
• Spanish bond spread down 0.1bps at 62.5bps/ Portuguese spread down 0.5bps at 58.3bps