EGBs-GILTS CASH CLOSE: Gilts Outperform On "Plan B"

Gilts easily underperformed Bunds Wednesday, with periphery spreads also widening.

• UK yields had fallen sharply by late morning following reports that the gov't would move to "Plan B" Covid restrictions, but the move fully reversed and then some after a promising Omicron efficacy report just before midday from vaccine-makers Pfizer/Biontech.
• The latter saw 10Y Bund yields rise nearly 10bp from the low over the afternoon.
• No particular trigger for BTP weakness, but some big cash selling noted in the morning set off spread-widening (and equities weakened over the session, so modestly risk-off).
• ECB's Schnabel noted the bank would not hike before ending net asset purchases (contrasting w Holzmann's comments earlier in the week).

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 2.5bps at -0.676%, 5-Yr is up 4.6bps at -0.555%, 10-Yr is up 6.2bps at -0.313%, and 30-Yr is up 7.7bps at -0.016%.
• UK: The 2-Yr yield is unchanged at 0.462%, 5-Yr is up 1bps at 0.582%, 10-Yr is up 4.5bps at 0.775%, and 30-Yr is up 3.4bps at 0.837%.
• Italian BTP spread up 4.3bps at 133.9bps / Greek up 6bps at 169.6bps