EGBs-GILTS CASH CLOSE: Long-End UK Sticks Out Again Amid Broader Rally

The Gilt long-end stuck out once again in an otherwise very positive session for European FI Tuesday, as Monday's rally extended.

• 30Y Gilt yields jumped over 4% for the first time since last Thursday, rising 18bp after today's BoE's long-dated Gilt purchase operation had zero takeup.
• Yields came off session lows set in the morning (Schatz finished 11bp higher vs the lows) but were down overall. The key driver was a continued downward repricing of central bank tightening expectations, with the latest catalyst the RBA's surprisingly small 25bp hike overnight.
• MNI's Europe Pi positioning indicator suggested significant short covering in bond futures Monday, and Tuesday may have seen more of the same.
• Risk assets rallied with the US dollar under pressure; helping periphery EGB spreads tighten.

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

• Germany: The 2-Yr yield is down 5bps at 1.57%, 5-Yr is down 6bps at 1.707%, 10-Yr is down 4.6bps at 1.871%, and 30-Yr is down 1.5bps at 1.907%.
• UK: The 2-Yr yield is down 13.3bps at 3.92%, 5-Yr is down 11.5bps at 4.111%, 10-Yr is down 8.9bps at 3.875%, and 30-Yr is up 15bps at 4.038%.
• Italian BTP spread down 2.2bps at 230.7bps / Greek down 6.9bps at 277.2bps