EGBs-GILTS CASH CLOSE: Data Induces Selloff

Gilts and Bunds remained under pressure Thursday amid a combination of solid Eurozone inflation data and continued signs of US economic resilience.

• The German curve belly underperformed as national inflation came in slightly above expectations, following Spanish core coming in above survey - all but cementing a 25bp July ECB rate hike (90+% priced).
• The UK curve bear flattened as Wednesday's dovish central bank repricing was reversed (BoE terminal +7bp on the day), pushing up 2Y yields by 8bp.
• The selloff accelerated in the afternoon on US jobless claims coming in lower than expected and Q1 GDP revised higher, underpinning the "higher for longer" rate expectations theme of the week.
• We get the final major pieces of the Eurozone June inflation puzzle early Friday, with Dutch and French flash readings, ahead of the bloc-wide print later in the morning. We also get UK GDP.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 9.2bps at 3.196%, 5-Yr is up 10.4bps at 2.568%, 10-Yr is up 10.1bps at 2.416%, and 30-Yr is up 6.6bps at 2.427%.
• UK: The 2-Yr yield is up 8.2bps at 5.228%, 5-Yr is up 5.6bps at 4.624%, 10-Yr is up 6.6bps at 4.382%, and 30-Yr is up 5.4bps at 4.433%.
• Italian BTP spread up 2bps at 168.3bps Spanish up 1.4bps at 99.1bps