EGBs-GILTS CASH CLOSE: Gilts Fade Early Gains

Thursday saw yields drop across the European core FI space, with periphery EGB yields also dipping but unable to keep pace with Bunds.

• While Bund and Gilt yields closed with similar moves, the direction of travel varied: UK yields dropping sharply early and retracing higher over the rest of the session (30s yields ending higher after an early drop), while German yields steadily fell.
• The latter mirrored general risk appetite, with Eurozone equities sliding.
• The main news of the session came from ECB sources pieces. Reuters noted the Gov Council will discuss at next week's meeting a temporary increase in the APP with limits on size/timespan. BBG reported the ECB could consider expanding PEPP reinvestment, incl more geographic flexibility.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 2.5bps at -0.701%, 5-Yr is down 3.9bps at -0.594%, 10-Yr is down 4bps at -0.353%, and 30-Yr is down 2.9bps at -0.045%.
• UK: The 2-Yr yield is down 3.2bps at 0.43%, 5-Yr is down 2.8bps at 0.554%, 10-Yr is down 2bps at 0.755%, and 30-Yr is up 2.3bps at 0.86%.
• Italian BTP spread up 1bps at 134.9bps / Greek up 3.9bps at 173.5bps