EGBs-GILTS CASH CLOSE: Macron Malaise Sinks BTPs

European bond yields rose sharply Tuesday with periphery EGBs particularly badly hit, with a combination of Fed tightening prospects and political risk contributing to the weakness.

• Concern that a Macron victory in the French presidential election is no longer clear-cut pushed BTP spreads significantly wider. 10Y Italy/Germany rose 8.4bp, closing on the session high (and widest since March 11).
• Fed Gov Brainard's hawkish-leaning comments in the afternoon spurred a sell-off in Treasuries, with Bunds and Gilts following suit.
• Gilt and Bund yields widened more or less in parallel, with the exception of UK short-end underperformance.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 6.1bps at -0.022%, 5-Yr is up 9.8bps at 0.443%, 10-Yr is up 10.8bps at 0.614%, and 30-Yr is up 9.4bps at 0.729%.
• UK: The 2-Yr yield is up 9.3bps at 1.459%, 5-Yr is up 9.2bps at 1.479%, 10-Yr is up 10.7bps at 1.654%, and 30-Yr is up 9.7bps at 1.766%.
• Italian BTP spread up 8.4bps at 164.8bps / Spanish up 4bps at 98.6bps