EGBs-GILTS CASH CLOSE: German Long-End Yields Hit Post-2011 Highs

European core yields closed on the highs Wednesday after an afternoon selloff in sympathy with US Treasuries.

• The bellies of the German and UK curves underperformed, with Bobl yields at a post-March high.
• 10Y and 30Y German yields started the day constructively but after a sell-off in the last 2 hours of trade alongside Tsys (but with no particular catalyst) closed at a new post-2011 high. UK rates sold off but in contrast the curve move was more of a bear flattening motion.
• Peripheral spreads widened amid anxiety over the Italian government's deficit forecasts due to be released after the cash close, and a broader risk-off move (equities down once again).
• Data was 2nd tier, with Euro money supply contracting more quickly than expected in August, while German and French consumer confidence was a little soft but basically in line. ECB's Elderson told MNI that policy rates have not necessarily peaked.
• MNI hosts an event with BoE's Hauser Thursday morning; we also get appearances by ECB's Holzmann and BoE's Greene.
• The September flash inflation round unofficially begins at 0630UK time Thursday with Germany's North Rhine Westphalia setting the tone for the rest of the prints through Friday morning, including Spain and the German national number Thursday. Our preview is here (PDF).

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 1.3bps at 3.244%, 5-Yr is up 4.1bps at 2.812%, 10-Yr is up 3.5bps at 2.843%, and 30-Yr is up 2.9bps at 3.033%.
• UK: The 2-Yr yield is up 6.6bps at 4.874%, 5-Yr is up 7.4bps at 4.472%, 10-Yr is up 3.2bps at 4.358%, and 30-Yr is down 1.2bps at 4.793%.
• Italian BTP spread up 1.1bps at 194.5bps / Greek up 3.3bps at 153.3bps