EGBs-GILTS CASH CLOSE: Global Developments Weigh

Core European FI continued to weaken Friday, with Bunds marginally underperforming Gilts.

• With the European data docket relatively light once again (UK inflation expectations edged lower but this wasn't a market mover), global developments weighed.
• The results of Japanese union wage agreements overnight were seen as likely to tilt the Bank of Japan toward exiting negative rates next week, helping apply some pressure to global core FI this morning.
• Yields edged lower by late morning on light headline flow, but ticked up in early afternoon with above-expected core US import price data and a solid outlook component within the Empire State survey.
• The German curve bear flattened on the day, with the UK's fairly flat with the belly underperforming.
• Periphery spreads finished mostly tighter, with BTPs recovering some of Thursday's late outsized widening.
• Next week's schedule is replete with central bank decisions, including the BoE next Thursday (and the BOJ and Fed earlier in the week), while key data will also feature (including flash PMIs and UK CPI).

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 3bps at 2.946%, 5-Yr is up 1.8bps at 2.468%, 10-Yr is up 1.6bps at 2.442%, and 30-Yr is up 0.6bps at 2.58%.
• UK: The 2-Yr yield is up 1.1bps at 4.331%, 5-Yr is up 1.9bps at 4.017%, 10-Yr is up 1.2bps at 4.102%, and 30-Yr is up 0.3bps at 4.531%.
• Italian BTP spread down 1.9bps at 125.7bps / Spanish down 0.8bps at 80.2bps