EGBs-GILTS CASH CLOSE: Some Relief Ahead Of Jackson Hole

EGBs and Gilts enjoyed a relief rally Thursday following a selloff earlier in the week, and ahead of Friday's highly anticipated speech by Fed Chair Powell.

• Little in the way of obvious headline drivers Thursday, with trading within the prior session's ranges, and only a modest and brief reaction to data (stronger-than-expected German IFO in the morning and US GDP / jobless claims in the afternoon).
• As losses have been led earlier this week by the short end and belly of the UK and German curves, those segments outperformed today.
• Euribor futures rose for the first time since Aug 14 (Dec23 down 9bp implied), while UK rate futures enjoyed their biggest jump of the month (down 13.5bp implied).
• Periphery EGB spreads fell sharply: 10Y BTPs down nearly 8bp to Bunds (the biggest narrowing since Aug 3), while GGBs were 4+bp tighter.

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

• Germany: The 2-Yr yield is down 5bps at 0.871%, 5-Yr is down 7.3bps at 1.085%, 10-Yr is down 5.3bps at 1.317%, and 30-Yr is down 0.8bps at 1.496%.
• UK: The 2-Yr yield is down 13.2bps at 2.806%, 5-Yr is down 12.6bps at 2.577%, 10-Yr is down 8.3bps at 2.615%, and 30-Yr is down 4.4bps at 2.89%.
• Italian BTP spread down 7.7bps at 224.1bps / down 4.2bps at 258.3bps