EGBs-GILTS CASH CLOSE: Pre-ECB Rally

After jumping on the open following above-expected UK CPI data, European yields fell steady throughout Wednesday's session.

• Yields continued to move lower in the afternoon after and despite a US producer price upside surprise. Bunds bull flattened, Gilts bull steepened.
• Periphery spreads reversed earlier widening as well.
• There was no obvious fundamental driver, but with modest volumes and a long weekend / ECB decision imminent, there appeared to be an element of unwinding positions following an extended rise in yields.
• See our ECB preview (and note the title) - "Be Prepared For A Hawkish Surprise".

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.1bps at 0.074%, 5-Yr is down 2.4bps at 0.549%, 10-Yr is down 2.4bps at 0.766%, and 30-Yr is down 2.6bps at 0.901%.
• UK: The 2-Yr yield is down 1.9bps at 1.489%, 5-Yr is down 1.5bps at 1.549%, 10-Yr is down 0.4bps at 1.799%, and 30-Yr is down 0.4bps at 1.946%.
• Italian BTP spread down 1.2bps at 160.7bps / Spanish up 1.4bps at 93.6bps