EGBs-GILTS CASH CLOSE: Strong Bull Flattening

A fairly relentless rally for long-dated Bunds and Gilts over the course of Tuesday's session resulted in some strong bull flattening in those curves. German 5s30s touched the lowest level since early May, while 10-Yr Gilt yields had a record close.

Even so, periphery EGBs outperformed on an otherwise mixed day for risk assets, with spreads narrowing across the complex. Closing levels:

• Germany: The 2-Yr yield is down 0.8bps at -0.706%, 5-Yr is down 1.7bps at -0.727%, 10-Yr is down 3bps at -0.553%, and 30-Yr is down 4.2bps at -0.141%.
• UK: The 2-Yr yield is up 0.2bps at -0.068%, 5-Yr is down 0.7bps at -0.133%, 10-Yr is down 2.2bps at 0.077%, and 30-Yr is down 2.3bps at 0.6%.

10-Yr Periphery EGB Spreads:

• Italian BTP spread down 3bps at 150bps
• Spanish bond spread down 2.3bps at 83.6bps
• Portuguese PGB spread down 1.7bps at 85.2bps
• Greek bond spread down 1.1bps at 160.3bps