BONDS: EGBs-GILTS CASH CLOSE: Gilts Underperform On Renewed Fiscal Concerns

European curves bear steepened lightly Friday.

• Gilts underperformed, with the latest UK public sector borrowing figures showing further fiscal deterioration and weighing on the long-end.
• Elsewhere, the calendar was relatively light to conclude a busy week. In dovish-leaning data: German PPI came in below consensus, while French employment expectations weakening.
• With no impactful US data in the European afternoon, German and UK yields closed at/near both session and weekly highs.
• The UK and German curves both bear steepened on the day. Periphery / semi-core EGB spreads tightened around 1bp.
• The week as a whole saw light twist steepening in the UK curve (2Y -0.2bp, 10Y +4.4bp), with the German curve bear steepening (2Y +0.5bp, 10Y +3.3bp).
• Next week's European calendar is a little lighter, and headlined by September flash PMIs. 

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 1.2bps at 2.023%, 5-Yr is up 2bps at 2.326%, 10-Yr is up 2.2bps at 2.748%, and 30-Yr is up 2.8bps at 3.337%.
• UK: The 2-Yr yield is up 2.1bps at 3.982%, 5-Yr is up 2.9bps at 4.132%, 10-Yr is up 3.9bps at 4.715%, and 30-Yr is up 5.2bps at 5.559%.
• Italian BTP spread down 1.2bps at 78.5bps / Spanish down 1.2bps at 54.8bps