EGBs-GILTS CASH CLOSE: Gilts Underperform Ahead Of UK Autumn Statement

Bunds outperformed Gilts and reversed most of Monday's losses in a constructive session Tuesday, with the German curve bull flattening and the UK's twist flattening.

• ECB and BoE speakers largely reiterated the higher-for-longer narrative, though some of BoE Gov Bailey's commentary today re market pricing were explicit than in the past, in line with those that we have seen recently from hawks Mann and Greene.
• BTPs underperformed with spreads widening marginally on the day. The European Commission warned that the draft 2024 budgets of multiple countries were either not fully in line or risk not being in line with EU guidance, including Germany, Italy, and France.
• Gilts started strong but traded with little direction, with futures trade beginning to reflect the quarterly roll period (MNI Europe Pi sees the contract as marginally short going into the roll).
• The UK autumn statement looms large Wednesday - MNI's preview was out today, including potential impact on Gilt issuance.
• The European data slate remains relatively thin Wednesday, with Eurozone consumer confidence the highlight. We also hear from ECB's Nagel and Centeno. Additionally, the Netherlands holds elections - MNI's preview is here.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 3.3bps at 2.994%, 5-Yr is down 5bps at 2.521%, 10-Yr is down 4.5bps at 2.566%, and 30-Yr is down 3.3bps at 2.77%.
• UK: The 2-Yr yield is up 1.4bps at 4.545%, 5-Yr is up 2.6bps at 4.138%, 10-Yr is down 2bps at 4.105%, and 30-Yr is down 1.5bps at 4.537%.
• Italian BTP spread up 1.7bps at 175.1bps / Greek down 1.5bps at 120.2bps