EGBs-GILTS CASH CLOSE: Gilts Underperform Inverting Bunds

Bunds enjoyed another constructive session Thursday while Gilts weakened, with trade on the quiet side amid a US holiday.

• Despite an above-expected IFO, German curve inversion once again caught the eye as growth concerns persisted: with the short end relatively anchored, multiple spread segments of the curve hit fresh closing lows for the cycle.
• Plenty of central bank communications: ECB Oct meeting minutes met expectations that 50bp hike at the Dec meeting was more likely than 75, though Schnabel said room for a slowdown in hike pace is limited.
• Among other BoE speakers, Ramsden delivered dovish-tilting comments, though terminal hike pricing firmed overall on the session and the short end underperformed on the UK curve.
• With a risk-on cross-asset theme, periphery EGB spreads tightened.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 2.8bps at 2.113%, 5-Yr is down 7bps at 1.896%, 10-Yr is down 8bps at 1.85%, and 30-Yr is down 8.3bps at 1.793%.
• UK: The 2-Yr yield is up 7.9bps at 3.209%, 5-Yr is up 3.6bps at 3.22%, 10-Yr is up 2.7bps at 3.038%, and 30-Yr is up 7.9bps at 3.275%.
• Italian BTP spread down 5.3bps at 182.4bps / Greek down 3bps at 223bps