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EGBs-GILTS CASH CLOSE: UK-EU Fissures Overshadow ECB


Gilt yields came off session highs around 1530BST as the EU effectively gave the UK a deadline of end-month to amend the proposed internal markets bill. The curve steepened as the short-end and belly outperformed.

Conversely, Bunds underperformed throughout the session as the ECB stood pat, and was arguably a little on the hawkish side in terms of the outlook (and euro exchange rate). Periphery spreads came down pre-ECB, and stayed down, despite equities retracing. Closing levels:

  • Germany: The 2-Yr yield is up 2.4bps at -0.667%, 5-Yr is up 3bps at -0.644%, 10-Yr is up 2.9bps at -0.433%, and 30-Yr is up 1.6bps at 0.009%.
  • UK: The 2-Yr yield is down 2.5bps at -0.108%, 5-Yr is down 2.5bps at -0.086%, 10-Yr is down 1bps at 0.227%, and 30-Yr is up 0.4bps at 0.809%.

10-Yr Periphery EGB Spreads:

  • Italian BTP spread down 4.2bps at 144.1bps
  • Spanish bond spread down 1.8bps at 78.3bps
  • Portuguese PGB spread down 2.1bps at 80.3bps
  • Greek bond spread down 5bps at 156.7bps

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