EGBs-GILTS CASH CLOSE: 4th Down Day In 5 Sees Bellies Underperform

Bunds and Gilts weakened for the 4th session in 5 Thursday with curve bellies undeperforming, as central bank speakers maintained a cautious tone on the rate cut trajectory.

• ECB's Lane reiterated that more disinflation will need to be seen before having confidence that inflation will sustainably return to target. Wunsch, and - after the close, Holzmann - were unsurprisingly hawkish. All of the above eyed wage growth dynamics in particular.
• BoE's Mann said little to suggest she would soon change her vote after opting for a hike in February, and noted she "can't say whether there will be rate cuts this year".
• On the day, 2024 ECB and BoE cut pricing were each pared by 4-5bp.
• Gilts underperformed Bunds, with both the UK and German curves leaning bear flatter (though as mentioned, the bellies of the curves performed weakest, as rate cuts got priced out).
• Periphery spreads were largely unchanged, with GGBs outperforming.
• Friday morning's schedule includes Italian industrial production and final German inflation data.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 3bps at 2.66%, 5-Yr is up 4.1bps at 2.284%, 10-Yr is up 3.8bps at 2.354%, and 30-Yr is up 2.9bps at 2.569%.
• UK: The 2-Yr yield is up 7.6bps at 4.553%, 5-Yr is up 8bps at 4.052%, 10-Yr is up 6.3bps at 4.051%, and 30-Yr is up 3.9bps at 4.609%.
• Italian BTP spread up 0.4bps at 157.7bps / Greek down 3.4bps at 115.2bps