EGBs-GILTS CASH CLOSE: Gilts Soar On BoE Stunner

Gilts saw one of the biggest rallies in years after the BoE unexpectedly held rates Thursday, pulling the rest of the global FI space with them.

• 2Yr Gilt yields outperformed, and STIR contracts rallied hard, with the BoE now seen making its next 15bp hike only in February, and ECB liftoff pushed back from 2022 to 2023.
• 5Yr UK yields fell the most since the Brexit referendum.
• Bunds couldn't keep pace but still saw strength across the curve; periphery spreads tightened on reduced likelihood of ECB tightening and a broader risk-on atmosphere.
• BoE commentary including Cunliffe later today, and Ramsden, Pill, Tenreyro, Broadbent, and Bailey Friday will be in focus.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 5.6bps at -0.71%, 5-Yr is down 8.3bps at -0.559%, 10-Yr is down 5.6bps at -0.224%, and 30-Yr is up 1.2bps at 0.159%.
• UK: The 2-Yr yield is down 20.6bps at 0.498%, 5-Yr is down 19.3bps at 0.66%, 10-Yr is down 13.1bps at 0.944%, and 30-Yr is down 5.6bps at 1.144%.
• Italian BTP spread down 5.9bps at 115.7bps / Greek down 2.9bps at 134bps