BONDS: EGBs-GILTS CASH CLOSE: Equity Pullback Keeps Core FI Underpinned

Front-end Bunds and long-end Gilts outperformed on the respective curves Thursday, with EGB periphery/semi-core spreads widening.

• Core FI weakened in European morning trade, with the EGB space weighed down in part by Italian/Greek supply. Eurozone IP (above consensus, but in-line with MNI tracking) didn't appear to be a negative trigger in itself.
• But US tariff concerns once again returned to the forefront of market movements, with Bunds gaining as President Trump threatened soaring tariffs on US imports of EU alcoholic beverages. Meanwhile renewed Green Party opposition to the incoming government's fiscal plan also saw a Bund boost.
• A renewed pullback in equities saw yields enter the cash close at/near the lows.
• The German curve bull steepened, with the UK's bull flattening. BTPs and GGBs underperformed on the periphery, again with supply a factor.
• Friday's agenda includes UK monthly activity / GDP, Italian industrial production, final Feb CPI for France/Germany/Spain, and appearances by ECB's Escriva and Cipollone.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 4.2bps at 2.183%, 5-Yr is down 3.6bps at 2.486%, 10-Yr is down 2.2bps at 2.855%, and 30-Yr is up 0.9bps at 3.175%.
• UK: The 2-Yr yield is down 3.3bps at 4.192%, 5-Yr is down 3.8bps at 4.3%, 10-Yr is down 4.5bps at 4.677%, and 30-Yr is down 4.5bps at 5.281%.
• Italian BTP spread up 3.2bps at 114.8bps / Greek up 2.9bps at 84.8bps