EGBs-GILTS CASH CLOSE: Solid End To Volatile Week/Month/Quarter

European yields fell to end the week/month/quarter, with German instruments outperforming UK counterparts, but 2Y and 30Y Gilts seeing the sharpest yield drops.

• Yields rose sharply in the late afternoon, with little discernable trigger (quarter and month-end possibly a factor), and in fact defied US data flow (including a very weak MNI Chicago PMI).
• French inflation surprised to the downside, but Italy's was in line and Eurozone was higher than expected.
• While the Gilt market has calmed considerably since mid-week, there was some modest disappointment that the OBR wouldn't publish a full forecast of the new budget earlier than 23 Nov.
• BoE Nov hike pricing ended the week close to 140bp, vs well above 160bp mid-week.
• BoI's Visco warned of big rate hikes risking a recession; no reaction in front-end rate pricing though.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany:

• Germany: The 2-Yr yield is down 4.3bps at 1.761%, 5-Yr is down 6.9bps at 1.963%, 10-Yr is down 7.3bps at 2.108%, and 30-Yr is down 6.5bps at 2.09%.
• UK: The 2-Yr yield is down 16.5bps at 4.231%, 5-Yr is down 4bps at 4.394%, 10-Yr is down 5bps at 4.093%, and 30-Yr is down 14bps at 3.825%.
• Italian BTP spread down 6.3bps at 240.9bps / Spanish down 1.1bps at 118bps