EGBs-GILTS CASH CLOSE: Gilts Underperform In Disorderly Session

Global core bond yields rose further Thursday, in increasingly disorderly fashion.

• The hawkish Fed guidance late Wednesday continued to reverberate, with volatility exacerbated by big swings in multiple currencies early Thursday including the Swiss franc and the Japanese yen - the latter of which saw official intervention in support for the first time since 1998.
• Despite a 50bp vs 75bp hike by the BoE, Gilts underperformed, with yields rising in double-digits across the curve following the Bank following through with Gilt sales starting in October.
• Additionally, Friday sees an updated UK fiscal statement, with some government measures seen driving Gilt weakness.
• Bund yields broke through the 2014 highs; futures saw breaks of support across the board.
• Against that backdrop, and despite a risk-off atmosphere, periphery spreads found opportunity to tighten.
• In addition to the UK fiscal announcement, we get preliminary PMI data Friday.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany:

• Germany: The 2-Yr yield is up 8.7bps at 1.846%, 5-Yr is up 9.7bps at 1.936%, 10-Yr is up 7.2bps at 1.965%, and 30-Yr is up 3.2bps at 1.87%.
• UK: The 2-Yr yield is up 13.8bps at 3.528%, 5-Yr is up 18.3bps at 3.563%, 10-Yr is up 18.4bps at 3.495%, and 30-Yr is up 18.6bps at 3.775%.
• Italian BTP spread down 3.8bps at 220.4bps / Greek down 3.4bps at 253.5bps