EGBs-GILTS CASH CLOSE: Strong End To The Week

European core FI enjoyed a strong end to the week, with Germany outperforming at the short end sand the UK impressing further down the curve.

• A few factors set a bullish tone early in the session: a broad sell-off in equities, weakness in commodities prices, and poor UK data (Dec retail sales missed badly).
• Bund and Gilt yields ended off their lows, as equities bounced a little in the afternoon.
• Volumes on the lighter side however, with an eye on next week's Fed decision.
• More immediately, some focus on the Italian presidential election Monday.
• BTPs and GGBs underperformed.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 4.1bps at -0.618%, 5-Yr is down 3.7bps at -0.333%, 10-Yr is down 4.1bps at -0.065%, and 30-Yr is down 4.1bps at 0.231%.
• UK: The 2-Yr yield is down 1.7bps at 0.882%, 5-Yr is down 4.6bps at 0.997%, 10-Yr is down 5.4bps at 1.171%, and 30-Yr is down 4.9bps at 1.298%.
• Italian BTP spread up 2.7bps at 135.3bps / Greek up 3.4bps at 176.5bps