EGBs-GILTS CASH CLOSE: Peripheries Outperform As PMIs Impress

European yields opened the week mixed, with limited directional conviction Monday as continued strength in survey data was weighed ahead of next week's ECB decision.

• Periphery EGBs outperformed (BTP / GGB spreads down about 4bp), while Germany underperformed the UK. The UK curve bull flattened, with 2s10s closing at the most inverted since September; the German curve mildly bear steepened out to 10Y, with Buxl outperforming.
• Futures volume was largely rolls focused ahead of Thursday's 1st notice.
• Italian and Spanish Service/Composite PMIs for November surprised solidly to the upside, though the overall Eurozone final reading was revised slightly down from flash.
• ECB's Makhlouf said he favoured a 50bp hike next week, echoing comments by Villeroy over the weekend.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is up 1.1bps at 2.12%, 5-Yr is up 1.9bps at 1.889%, 10-Yr is up 2.4bps at 1.88%, and 30-Yr is down 1.1bps at 1.679%.
• UK: The 2-Yr yield is down 1.4bps at 3.329%, 5-Yr is down 3.8bps at 3.245%, 10-Yr is down 5bps at 3.104%, and 30-Yr is down 4.9bps at 3.447%.
• Italian BTP spread down 3.8bps at 187.3bps / Greek down 4.2bps at 200.4bps