EGBs-GILTS CASH CLOSE: UK Bull Flattening, BTPs Underperform

The German curve twist steepened while the UK's bull flattened Thursday.

• After a strong open, Bunds and Gilts pulled back gradually for the next several hours.
• Yields hit session highs in mid-afternoon before fading alongside US Treasuries after MNI's interview with Philadelphia Fed Pres Harker who provided the first (dovish) comments from Jackson Hole.
• BTPs underperformed the European space, with Italian banking sector uncertainty rekindled as BBG reported that the government is set to is eyeing a borrower-friendly measure on bad loans.
• Looking ahead, the Jackson Hole agenda is released overnight, with Friday's focus being German IFO and speeches by Fed's Powell and ECB's Lagarde. We also get a BTP Short-Term auction.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 1.1bps at 2.963%, 5-Yr is unchanged at 2.519%, 10-Yr is up 0.2bps at 2.519%, and 30-Yr is down 0.5bps at 2.625%.
• UK: The 2-Yr yield is down 1.3bps at 4.96%, 5-Yr is down 1.5bps at 4.475%, 10-Yr is down 4bps at 4.428%, and 30-Yr is down 5.1bps at 4.645%.
• Italian BTP spread up 0.6bps at 165.8bps / Spanish up 0.1bps at 102.6bps