EGBs-GILTS CASH CLOSE: Modest Steepening Ahead Of A Big Week

European curves steepened modestly to end the week, with periphery EGB spreads widening in anticipation of next week's data- and central bank-heavy schedule.

• 10s outperformed on the UK curve, though 30s underperformance meant the curve bear steepened overall; the German curve twist steepened with 2Y yields dipping.
• BTPs underperformed alongside a tick higher in terminal ECB hike expectations +2bp to 143bp), in preparation for next Thursday's decision.
• With limited data on the European docket, attention was on the US personal income/spending release which was in line with expectations and not a market mover. Likewise, no central bank speakers of note ahead of next week's key decisions, including the Federal Reserve, BoE and ECB.
• Next week we also get heavy EGB supply and flash January eurozone inflation data.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.4bps at 2.58%, 5-Yr is up 2bps at 2.258%, 10-Yr is up 2.3bps at 2.239%, and 30-Yr is up 1.4bps at 2.195%.
• UK: The 2-Yr yield is up 1bps at 3.474%, 5-Yr is up 0.9bps at 3.201%, 10-Yr is up 0.6bps at 3.323%, and 30-Yr is up 1.9bps at 3.681%.
• Italian BTP spread up 3.9bps at 185.8bps / Spanish up 1.8bps at 98.7bps