EGBs-GILTS CASH CLOSE: Opposing Forces Leave Yields Flat

A back-and-forth final session of the week in the Europe FI space, with price action in both directions leaving yields basically flat, with periphery EGB spreads wider.

• A strong start for Gilts / early Bund strength - in part due to a bigger than expected reduction in the gilt remit for FY21/22 - reversed on strong French flash PMIs. But then another rebound on a German PMI miss, and continued gains as equities fell to session lows.
• Data came to the fore again in the afternoon with EGBs / Gilts moving lower mirroring US Tsys, after a beat in US PMIs and new home sales data.
• Not to mention a sharp drop at midday on a BBG sources piece reporting a "difficult" decision at the June meeting on whether to slow PEPP purchases (echoing Tuesday's MNI Exclusive).
• After hours sees a few ratings reviews, including the UK, Italy and Greece.

Closing yields/10-Yr Spreads to Bunds:

• Germany: The 2-Yr yield is down 0.1bps at -0.691%, 5-Yr is down 0.6bps at -0.605%, 10-Yr is down 0.5bps at -0.257%, and 30-Yr is up 0.4bps at 0.29%.
• UK: The 2-Yr yield is down 0.7bps at 0.036%, 5-Yr is down 0.8bps at 0.308%, 10-Yr is up 0.4bps at 0.744%, and 30-Yr is up 0.2bps at 1.277%.
• Italian BTP spread up 3.1bps at 103.8bps / Spanish spread up 1bps at 65.5bp