EGBs-GILTS CASH CLOSE: Yields Resume Their Ascension

The long ends of the German and UK curves saw double-digit yield rises Thursday in a bear steepening.

• Though Ascension Day holidays meant a fairly thin calendar (BoE TSC testimony was a non-event), yields resumed their ascent largely on US-centric considerations.
• Optimism over a debt ceiling deal in Washington kept risk assets bid, and an indication of support for a June Fed hike from Dallas Fed Pres Logan put pressure on the global short-end.
• Greece was the standout performer, with spreads vs Italy falling 9bp to nearly the biggest all-time premium to BTPs (closed 27.2bp vs the record 29.2bp close on Jul 27) ahead of May 21 elections.
• After a dearth of data today, we get some 2nd tier reports Friday to conclude the week, including German PPI. We also hear from BoE's Haskel, along with the ECB's Schnabel, Lagarde, and de Cos.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany:

• Germany: The 2-Yr yield is up 6.1bps at 2.762%, 5-Yr is up 8.9bps at 2.416%, 10-Yr is up 11bps at 2.446%, and 30-Yr is up 12bps at 2.632%.
• UK: The 2-Yr yield is up 8.8bps at 3.955%, 5-Yr is up 10.7bps at 3.795%, 10-Yr is up 12bps at 3.957%, and 30-Yr is up 11.2bps at 4.381%.
• Italian BTP spread up 2bps at 186.7bps / Greek down 6.8bps at 159.5bps