EGBs-GILTS CASH CLOSE: Further Flattening

EGBs and Gilts closed Tuesday mixed, with curve flattening evident for the second consecutive session.

• After a constructive start to the day, albeit within the ranges seen since late last week, European yields ticked higher in early afternoon following stronger-than-expected Canadian CPI.
• The UK and German curves twist flattened, with a second consecutive session of short-end underperformance. Bunds modestly outperformed Gilts.
• Periphery EGB spreads closed modestly wider amid a broader subdued risk tone, partially reversing Monday's tightening.
• Wednesday's schedule includes UK CPI and German/French consumer confidence data. The week's focus continues to be Euro national level inflation data on Friday - MNI's preview will be published on Wednesday.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 0.4bps at 2.809%, 5-Yr is down 0.6bps at 2.424%, 10-Yr is down 0.8bps at 2.411%, and 30-Yr is down 1.4bps at 2.601%.
• UK: The 2-Yr yield is up 2.1bps at 4.211%, 5-Yr is up 1.1bps at 3.952%, 10-Yr is down 0.2bps at 4.079%, and 30-Yr is down 0.8bps at 4.576%.
• Italian BTP spread up 0.7bps at 151.7bps / Spanish up 0.1bps at 85.9bps