EGBs-GILTS CASH CLOSE: Greece Shines

Bunds pared early losses to finish flat on the session, with Gilts underperforming and bear steepening Tuesday. It was a risk-on atmosphere for most of the session, with equities bouncing sharply from Monday's sell-off, driving cross-asset price action.

• The standout though was Greece, with 10Y spreads falling 5+bp vs Germany after ECB's Stournaras said he expects the ECB to buy GGBs post-PEPP.
• No impactful data today but plenty of supply: syndication of inaugural Green gilt (GBP10bln size on books > GBP100bln) was the highlight but also sold were 3bln of 7Y Bund and E1bln of Finnish RFGB.
• Focus turns to the Fed decision Wednesday and the BoE /PMI data Thursday.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 0.6bps at -0.712%, 5-Yr is up 0.2bps at -0.633%, 10-Yr is up 0.3bps at -0.317%, and 30-Yr is up 0.1bps at 0.173%.
• UK: The 2-Yr yield is up 2.3bps at 0.279%, 5-Yr is up 2.2bps at 0.485%, 10-Yr is up 1.3bps at 0.807%, and 30-Yr is up 1.7bps at 1.119%.
• Italian BTP spread down 2.2bps at 101.3bps / Greek down 5.2bps at 109bps