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Periphery EGBs outperformed Thursday as the ECB maintained steady policy. Bunds and Gilts were hit in sympathy with US Tsys after a stronger-than-expected US inflation print, but yields ended well off session highs (Gilts underperformed).

  • Italian and Greek spreads tightened sharply as the ECB meeting did not offer many significant surprises; staff macro projections were revised higher.
  • Supply came from Italy (BTPs, EUR7.75bn) and Ireland (IGBs,EUR1.25bn).
  • UK GDP highlights Friday's docket; several speakers including ECB's Holzman and Knot, BOE's Bailey/Ramsden/Cunliffe as well as Chancellor Sunak.

Closing German/UK Yields And 10-Yr Spreads To Germany

  • Germany: The 2-Yr yield is down 0.9bps at -0.685%, 5-Yr is down 1.3bps at -0.628%, 10-Yr is down 1.2bps at -0.256%, and 30-Yr is unchanged at 0.312%.
  • UK: The 2-Yr yield is up 0.9bps at 0.067%, 5-Yr is up 1.2bps at 0.321%, 10-Yr is up 1.7bps at 0.747%, and 30-Yr is up 1.3bps at 1.279%.
  • Italian BTP spread down 2.2bps at 105.1bps/ Greek spread down 1.7bps at 106.1bps