Gilts strengthened again Tuesday, outperforming Bunds. The UK curve bull flattened again, with Germany's bear steepening.

• The main market attention in the morning was an FT article pointing to the BoE postponing QT, but this was subsequently denied by the Bank, leading Gilts to sell off.
• However, yields fell again in the early afternoon as US trading desks came online, and broadly shrugged off a spike in Treasury yields toward the cash close.
• No particular catalyst seen for the sustained afternoon recovery, though falling oil prices were seen underpinning European bonds.
• Periphery spreads were mixed, with the higher-beta instruments (BTPs, GGBs) underperforming.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany:

• Germany: The 2-Yr yield is up 2.1bps at 1.975%, 5-Yr is up 0.7bps at 2.087%, 10-Yr is up 1.4bps at 2.283%, and 30-Yr is up 2.7bps at 2.321%.
• UK: The 2-Yr yield is down 2.6bps at 3.563%, 5-Yr is down 4.7bps at 3.895%, 10-Yr is down 3.1bps at 3.946%, and 30-Yr is down 7.6bps at 4.302%.
• Italian BTP spread up 2.2bps at 241bps / Greek up 5.2bps at 272.2bps