EGBs-GILTS CASH CLOSE: 30Y Yields Stand Out Despite Bear Flattening

The German and UK curves bear flattened to start the week amid limited trading volumes, with US Treasuries leading the selloff rather than any Europe-specific catalysts.

• UK yields hit the highest levels since July across the curve, with the exception of 30Y yields which hit the highest since Oct 2022.
• German yields remained within recent ranges but 30Y yields briefly hit the highest since Jan 2014 (2.727%).
• BoE hike pricing picked up sharply (ECB peak rates edged higher to lesser extent) ahead of Tuesday's main highlights of UK jobs data (we put out a short preview of this today) and German ZEW, with UK CPI Wednesday the main event of the week.
• Periphery spreads were mixed, befitting a mixed day for risk assets - Greece outperformed, with Italy underperforming.
• Reminder that while markets remain open across Europe Tuesday, trading may be thinned by Assumption Day holidays observed in several countries.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 3.9bps at 3.078%, 5-Yr is up 2.2bps at 2.652%, 10-Yr is up 1.4bps at 2.637%, and 30-Yr is up 0.3bps at 2.709%.
• UK: The 2-Yr yield is up 4.9bps at 5.081%, 5-Yr is up 4.1bps at 4.571%, 10-Yr is up 3.9bps at 4.566%, and 30-Yr is up 2.5bps at 4.753%.
• Italian BTP spread up 1.2bps at 164.2bps / Greek down 2.1bps at 126bps