Core/semi-core Off Highs But Remain Firmer; Peripheries Tighten

Core/semi-core EGBs a have come off intraday highs, as firmer oil prices begin to weigh on the space.

• Brent crude futures are around 3% higher on the day as headlines r.e. UK/US strikes on Houthi-related targets in Yemen add a geopolitical risk premium to the market. The move has not yet fed through to Euro 5y5y inflation swaps (down 1.6bps at 2.239% today), but shorter-dated swaps are firmer.
• Bund remains up 67 ticks at 135.81, off highs of 135.97, having traded in a 45 tick range today. Initial sources of firmness from yesterday afternoon into the European open include safe-haven flows related to the above Middle-East events and relatively dovish rhetoric from ECB's Vujcic and Fed's Barkin yesterday.
• The German cash curve has bear flattened, while periphery spreads to Bunds are tighter, the latter aided by today's uptick in European equities.
• Today's local docket sees ECB's Lane speak at a conference on "Post-Pandemic Economic Governance and Next Generation EU" at 1230 GMT / 1330 CET. US PPI data will be eyed too r.e. its implications for the US PCE reading.