EGBs-GILTS CASH CLOSE: Bear Steepening Prevails

The UK and German curves bear steepened significantly Tuesday amid a big rise in yields at the long end, while periphery spreads closed mixed.

No particular trigger, particularly given that risk-off has prevailed for most of the afternoon with equities retracing earlier gains. Some pointing to positioning ahead of Fed Chair Powell's comments Thursday, and/or some follow-through from stronger-than-expected German data in the morning.

Also, Wednesday sees heavy supply (UK, Italy, Portugal, Germany; and possible Finland syndication), but little data and no speakers. Closing levels:

• Germany: The 2-Yr yield is up 2.1bps at -0.656%, 5-Yr is up 3.5bps at -0.649%, 10-Yr is up 6bps at -0.431%, and 30-Yr is up 6.5bps at 0.01%.
• UK: The 2-Yr yield is up 2bps at -0.021%, 5-Yr is up 3.7bps at -0.003%, 10-Yr is up 5bps at 0.263%, and 30-Yr is up 5.2bps at 0.841%.

10-Yr Periphery EGB Spreads:

• Italian BTP spread up 2.2bps at 145.7bps
• Spanish bond spread down 0.5bps at 81.3bps
• Portuguese PGB spread down 0.9bps at 83.5bps
• Greek bond spread down 4.7bps at 153bps