EGBs-GILTS CASH CLOSE: Bull Steeper Ahead Of Next Week's Data / ECB Hike

Core European FI ended a volatile week on a stronger note, with bull steepening in both the UK and German curves.

• German and UK 2Y yields fell 3+bp each as central bank hike prospects faded slightly (ECB terminal dipped 1bp, BoE 3bp).
• Any hawkish impact from stronger-than-expected UK retail sales faded quickly, with more global focus on potential dovishness from the BoJ at its meeting next week after multiple sources pieces suggested unchanged policy.
• Periphery bonds closed mixed, with Spanish yields seemingly unaffected by upcoming elections Sunday (MNI's preview is here).
• Beyond that, attention will swiftly be on Monday's flash PMI readings, then on the ECB decision Thursday and flash French/Spanish/German inflation Friday.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 3bps at 3.093%, 5-Yr is down 1.7bps at 2.554%, 10-Yr is down 2.1bps at 2.469%, and 30-Yr is down 1.6bps at 2.488%.
• UK: The 2-Yr yield is down 3.9bps at 4.955%, 5-Yr is down 1.4bps at 4.371%, 10-Yr is up 0.3bps at 4.28%, and 30-Yr is up 1.7bps at 4.429%.
• Italian BTP spread down 1bps at 160.9bps / Spanish up 1.2bps at 100.9bps