EGBs-GILTS CASH CLOSE: Core Yields Head Lower In The Afternoon

Bund yields almost entirely reversed the morning's move higher in the afternoon, and while Gilt yields remain higher on the day, they are off the session's highest levels. Periphery spreads traded with little direction throughout.

A Reuters sources piece pointing out discord on the ECB Governing Council, and later comments from Pres Lagarde (reiterating the bank stands ready to act if needed), helped support the afternoon's dovish tone for Bunds, whereas BoE's Ramsden pushing back against negative rates contributed to Gilt underperformance. Closing levels:

• Germany: The 2-Yr yield is up 0.3bps at -0.704%, 5-Yr is up 0.2bps at -0.715%, 10-Yr is up 0.1bps at -0.528%, and 30-Yr is up 0.3bps at -0.094%.
• UK: The 2-Yr yield is up 1.3bps at -0.055%, 5-Yr is up 1.1bps at -0.082%, 10-Yr is up 1.3bps at 0.202%, and 30-Yr is up 1.3bps at 0.743%.

10-Yr Periphery EGB Spreads:

• Italian BTP spread down 0.8bps at 140.7bps
• Spanish bond spread down 0.3bps at 77.4bps
• Portuguese PGB spread down 0.8bps at 78.9bps
• Greek bond spread up 1.2bps at 156.6bps