EGBs-GILTS CASH CLOSE: Early Gains Evaporate

Core European bond yields closed Monday relatively flat, after early gains evaporated in the afternoon.

• Bunds and Gilts posted modest gains in early trade, having tentatively found a floor since the US-data induced weakness late last week.
• There were no clear-cut triggers for subsequent afternoon weakness, which saw Bund and Gilt yields move a couple of basis points higher across the curve.
• Contributory factors included firming equities and US corporate bond supply amid thinner trading volumes.
• The German and UK curves both twist flattened, with short-end yields up modestly on the day. Periphery EGB spreads tightened in a generally risk-on session.
• Most attention this week will be on Thursday's data, including PMIs and quarterly Eurozone wage data, with the Fed's Jackson Hole event starting Friday.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 0.1bps at 2.434%, 5-Yr is up 0.2bps at 2.176%, 10-Yr is down 0.1bps at 2.246%, and 30-Yr is down 0.4bps at 2.463%.
• UK: The 2-Yr yield is up 1bps at 3.69%, 5-Yr is up 0.2bps at 3.738%, 10-Yr is down 0.4bps at 3.922%, and 30-Yr is down 1.1bps at 4.458%.
• Italian BTP spread down 1.8bps at 136.8bps / Spanish down 1.4bps at 82.9bps