EGBs-GILTS CASH CLOSE: Curves Steepen With Short-End Anchored

European curves twist steepened Monday, with short-end German and UK instruments remaining relatively anchored.

• Rate hike expectations in Europe lagged US counterparts (Fed funds peak +6bp vs flat for ECB and BoE), with few major catalysts in Europe in the session.
• The weakness in longer-dated Bunds and Gilts mirrored that of Treasuries, which took their cue from stronger-than-expected US data, and a heavy supply slate for the week.
• This meant UK and German 10Y yields rose for the 6th consecutive session.
• Periphery EGB spreads tightened slightly on the Bund move, despite weakness in equities / broader risk-off.
• After a quiet session for European data, things pick up Tuesday with UK labour market data and German ZEW. ECB's Centeno is set to speak.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.2bps at 2.879%, 5-Yr is up 2.2bps at 2.495%, 10-Yr is up 3.3bps at 2.473%, and 30-Yr is up 4.4bps at 2.551%.
• UK: The 2-Yr yield is down 0.5bps at 3.613%, 5-Yr is up 0.3bps at 3.511%, 10-Yr is up 2.4bps at 3.691%, and 30-Yr is up 2.5bps at 4.046%.
• Italian BTP spread down 2.6bps at 183.1bps / Spanish down 1.2bps at 102.5bps