EGBs-GILTS CASH CLOSE: Core FI Twist Steepens, BoE Speak / ECB Wages Eyed

Bunds and Gilts closed relatively unchanged Monday, with trading activity, macro developments and headlines all dulled by a US market holiday.

• Yields bottomed by mid-morning without any major catalysts evident, before drifting higher - though all very much within Friday's ranges. In futures terms, 450k March Bund contracts traded - around half of the usual volume.
• The German and UK curves leaned twist steeper with yields across almost all tenors closing within 1.0bp of Friday's close. Periphery spreads were mixed, with BTPs underperforming and PGBs outperforming, but the moves were fairly negligible.
• ECB pricing remained relatively steady: still around 104bp of ECB rate cuts seen through 2024 (first cut fully priced by June), while the 69bp priced for the BoE was about 4bp more than seen at Friday's close (first cut remains fully priced by Aug though now a little more firmly).
• Turning to Tuesday, focus will be on supply (EU syndication, German Schatz auction among others) and ECB negotiated wage data (scheduled for 1000GMT release).
• BoE's Bailey, Broadbent, Greene and Dhingra give testimony on the February Monetary Policy Report - see MNI's Gilt Week Ahead.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is unchanged at 2.816%, 5-Yr is down 0.3bps at 2.387%, 10-Yr is up 0.9bps at 2.411%, and 30-Yr is up 2.5bps at 2.569%.
• UK: The 2-Yr yield is down 0.6bps at 4.614%, 5-Yr is down 0.2bps at 4.134%, 10-Yr is unchanged at 4.108%, and 30-Yr is down 0.4bps at 4.644%.
• Italian BTP spread up 0.8bps at 149.1bps / Greek down 0.7bps at 107.9bps