BTPs Turn Cheaper

Periphery curves began the day firm but have cheapened in morning trade alongside Bunds, following a strong day driven by safe-haven flows yesterday.

• BTP yields up to 10-year tenors now turn higher on the day, while Portugal remains the outperformer at the 10-year point.
• The 10-Yr Bund/BTP spread currently is 0.1bps wider at 195.2bps, after yesterday's price action saw the spread compress by 11.4bps.
• The spread of 10-Yr Portuguese PGBs vs Bunds is 2.7bps tighter at 70.9bps, with the 2s10s curve bull flattening to trade 1.7bps tighter at 28bps.
• The European data docket is light today, with ECB-speak from Marrakech the main areas of interest before the US cash open. ECB's Centeno this morning has stuck to a dovish rhetoric as expected.
• Italian supply at 1000 BST will also be eyed, though is small relative to previous mid-month auctions and includes E1.0-1.5bln of the Green BTP.
• US CPI at 1330 BST will be the focus later, with headline expectations at 3.6% Y/Y and core at 4.1% Y/Y.