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Markets Mixed, EUR/USD The Standout


France Sells E10.355bn of OATs

EGBs/Gilts Cash Close: Risk Off


Very strong day for core FI, driven by global risk aversion (European stocks off 2-4%) amid rising COVID 2nd wave fears in Europe, with Bund and Gilt cash yields only slightly off session lows, and strong bull flattening seen.

Given the circumstances, periphery spreads didn't widen much, though the higher-beta credits (BTPs and GGBs) suffered most.

Closing levels:

Germany: The 2-Yr yield is down 3.2bps at -0.713%, 5-Yr is down 4.3bps at -0.729%, 10-Yr is down 4.4bps at -0.542%, and 30-Yr is down 5bps at -0.128%.

UK: The 2-Yr yield is down 1bps at -0.086%, 5-Yr is down 1.8bps at -0.132%, 10-Yr is down 3bps at 0.088%, and 30-Yr is down 2.7bps at 0.61%.

10-Yr Periphery EGB Spreads:

  • Italian BTP spread up 2.2bps at 151.2bps
  • Spanish bond spread up 1.3bps at 85.9bps
  • Portuguese PGB spread up 1.1bps at 86.4bps
  • Greek bond spread up 3.5bps at 160.9bps
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