EGBs-GILTS CASH CLOSE: Core Closes Strong

Bunds rallied for most of the session, sandwiched between stretches of sideways trade. Gilts rose steadily, BTP spreads stayed flat. Both German and UK yields closed on the lows.

• Talk of a Brexit deal being reached by the weekend rebuffed by later headlines pointing to continued UK-EU divides. This was compounded by news that the UK parliament would take up the controversial internal markets bill Monday, seen as a potential obstacle to a deal.
• Largely positive morning data (the only real miss was on Italy Nov Svcs PMI) was shrugged off.
• Friday's highlights include German factory orders and speeches by BOE's Saunders and Tenreyro.

Closing Levels / 10-Yr Periphery EGB Spreads:

• Germany: The 2-Yr yield is down 2.1bps at -0.737%, 5-Yr is down 3.5bps at -0.75%, 10-Yr is down 3.7bps at -0.556%, and 30-Yr is down 3.5bps at -0.14%.
• UK: The 2-Yr yield is down 2.1bps at -0.047%, 5-Yr is down 2.2bps at 0.003%, 10-Yr is down 3.2bps at 0.322%, and 30-Yr is down 2.6bps at 0.893%.
• Italian BTP spread up 0.7bps at 115.8bps
• Spanish bond spread up 0.5bps at 62.7bps