EGBs-GILTS CASH CLOSE: U.S. Jobs Disappointment Sets Bullish Tone

The event of the day Friday was inevitably going to be U.S. nonfarm payrolls, and it indeed proved the session's biggest catalyst as a weaker-than-expected report led to a bull flattening rally in Bunds and Gilts.

• Periphery spreads closed a little wider, with Greece and Portugal underperforming (the latter on 6-/10-Yr supply announcement).
• There was no key data or bond supply, and the only central bank speakers (ECB's Lagarde and Villeroy) spoke on climate change.
• The key ratings review this evening is Fitch on Italy, but no change in outlook/rating is expected, and Italian spreads were little changed today.
• Attention swiftly turns to next Thursday's ECB decision.

Closing German/UK Yields And 10-Yr Spreads To Germany

• Germany: The 2-Yr yield is down 0.3bps at -0.671%, 5-Yr is down 1.9bps at -0.598%, 10-Yr is down 3bps at -0.213%, and 30-Yr is down 2.8bps at 0.351%.
• UK: The 2-Yr yield is down 1.8bps at 0.069%, 5-Yr is down 3.5bps at 0.336%, 10-Yr is down 5.1bps at 0.79%, and 30-Yr is down 4.5bps at 1.326%.
• Italian BTP spread up 0.5bps at 108.6bps / Spanish spread up 1.2bps at 66.5bps