EGBs-GILTS: Curves Flatten On Brexit (And Not Much Else)

Monday saw a mostly quiet session with no meaningful data, supply, or speakers, and all the attention on Brexit headlines over the weekend and early on in the day. Most headlines focused on divisions between the EU-UK , in contrast w Friday's more optimistic tone.

• Gilts unsurprisingly outperformed; UK and German curves bull flattened while periphery spreads widened. And most of the move happened in early London trade, with limited price movement the rest of the day.
• Ultimately we continue to await developments ahead of this week's European Council, and attention on UK parliament as they eye the Internal Market Bill.
• Tuesday's docket includes German Dec ZEW and Gilt supply.

Closing Levels / 10-Yr Periphery EGB Spreads:

• Germany: The 2-Yr yield is down 1.2bps at -0.759%, 5-Yr is down 2.5bps at -0.777%, 10-Yr is down 3.5bps at -0.582%, and 30-Yr is down 3.6bps at -0.156%.
• UK: The 2-Yr yield is down 4bps at -0.075%, 5-Yr is down 5.3bps at -0.03%, 10-Yr is down 6.8bps at 0.283%, and 30-Yr is down 7bps at 0.854%.
• Italian BTP spread up 2bps at 119.2bps
• Spanish spread up 0.6bps at 63.4bps/ Portuguese up 0.9bps at 59.9bps