EGBs-GILTS CASH CLOSE: Rally Ahead Of Sunday 'Deadline' For Deal

Gilts have faded early gains made on no-deal Brexit concerns, but yields still remain firmly lower, with bull flattening intact. That said, Bunds actually outperformed on the day, with periphery spreads widening, as Eurozone equities fell sharply.

• FI opened strong on headlines that EU's von der Leyen told European leaders that a no-deal outcome was more likely than not, and later PM Johnson described no-deal as " very, very likely".
• The next deadline to reach a deal in the Brexit saga is said to be Sunday, though already various officials have suggested that this is not necessarily the end of the road.
• Thin calendar otherwise early next week, little in the way of data/speakers, and no bond supply the entire week. BoE Thursday is the main event.

Closing Levels / 10-Yr Periphery EGB Spreads:

• Germany: The 2-Yr yield is down 1.7bps at -0.783%, 5-Yr is down 2.5bps at -0.812%, 10-Yr is down 3.3bps at -0.636%, and 30-Yr is down 5.3bps at -0.239%.
• UK: The 2-Yr yield is up 0.3bps at -0.112%, 5-Yr is down 1.2bps at -0.095%, 10-Yr is down 2.9bps at 0.172%, and 30-Yr is down 3.1bps at 0.713%.
• Italian BTP spread up 2.9bps at 119.4bps
• Spanish bond spread up 1.3bps at 63.8bps/ Portuguese spread up 1.5bps at 59.8bps