EGBs-GILTS CASH CLOSE: Early Intraday Weakness Fades Again

European curves bull flattened Thursday, with early weakness fading and long end yields pulling back as the session progressed.

• For the second consecutive session, Gilts staged an afternoon rally, driven by a pullback in BoE hike expectations (down ~6bp from intraday highs set after a speech by BoE hawk Mann).
• And as with Wednesday, 10Y bund yields pulled back just shy of the 11-year high of 2.5744%, with long-end yields fading globally.
• With no particular catalyst (and unlike BoE, hike expectations for the ECB didn't shift much Thursday, with peak depo rate still seen at ~3.75%), BTPs outperformed with sharp spread tightening vs Bunds in the afternoon.
• Eurozone HICP and core CPI picked up 0.1pp in the final reading, but this didn't have a major market impact. Attention early Friday is on final German GDP and comments by Germany's Nagel.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.8bps at 2.913%, 5-Yr is down 3bps at 2.551%, 10-Yr is down 4.2bps at 2.478%, and 30-Yr is down 8.5bps at 2.423%.
• UK: The 2-Yr yield is down 0.4bps at 3.919%, 5-Yr is up 0.9bps at 3.571%, 10-Yr is down 1.3bps at 3.587%, and 30-Yr is down 0.6bps at 3.982%.
• Italian BTP spread down 3.6bps at 190.4bps / Spanish down 2bps at 96.5bps