EGBs-GILTS CASH CLOSE: Yields End Lower Ahead Of UK Data

Core European yields fell modestly Monday, with curves leaning bull steeper and periphery EGBs outperforming.

• Bunds and Gilts began the week constructively, with yields heading to session lows by midday.
• But befitting a day with little news/macro data flow, yields remained bounded by last week's ranges and reversed higher in the afternoon, with risk looming in the form of US CPI (Tuesday) and UK labour market/CPI data (Tues/Weds).
• Strengthening equities in the afternoon also weighed on core EGBs/Gilts, and helped periphery EGB spreads tighten further, led by BTPs.
• Of note, BoE's Bailey speaks after Monday's cash close.
• UK labour market data (MNI preview here) features early Tuesday, with wages in focus - German ZEW and US CPI arrive later in the session.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 2.3bps at 2.693%, 5-Yr is down 3bps at 2.306%, 10-Yr is down 2bps at 2.362%, and 30-Yr is down 1bps at 2.559%.
• UK: The 2-Yr yield is down 5.1bps at 4.551%, 5-Yr is down 4.8bps at 4.052%, 10-Yr is down 2.9bps at 4.057%, and 30-Yr is down 2.8bps at 4.585%.
• Italian BTP spread down 3.7bps at 154.7bps / Spanish down 2.5bps at 96.2bps