EGBs-GILTS CASH CLOSE: Greece Outperforms, Bunds And Gilts Mixed

Gilts underperformed Bunds to start the week, with European curves flattening.

• In a day of few catalysts, early trade saw fairly rangebound yields, leaning higher after the rally late last week.
• Yields fell back to session lows (and testing last Fridays' lowest levels) in seemingly risk-off mid-afternoon trade, as the USD strengthened, equities faded, and periphery spreads widened.
• Greece outperformed across the space, following Fitch's upgrade to BBB- (outlook stable) after hours on Friday.
• The day's central bank speakers (ECB's Lagarde, BoE's Dhingra) had little to say on current monetary policy and didn't move rates markets specifically.
• Even so, ECB rate cut pricing did deepen slightly on the day, though BoE implied cuts reversed somewhat. The UK curve closed bear flatter, with Germany's twist flattening.
• Tuesday's early highlight will be final Nov services PMIs.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 1.3bps at 2.695%, 5-Yr is up 1.1bps at 2.275%, 10-Yr is down 0.8bps at 2.354%, and 30-Yr is down 4.4bps at 2.59%.
• UK: The 2-Yr yield is up 8bps at 4.618%, 5-Yr is up 8bps at 4.186%, 10-Yr is up 5.4bps at 4.194%, and 30-Yr is up 5bps at 4.724%.
• Italian BTP spread up 3.3bps at 177.2bps /Greek down 2.3bps at 120bps