EGBS: Off Lows; Peripherals Tighten As Political Uncertainty Fades A Touch

 Core/semi-core EGBs are off intraday lows, though Bund futures are still a touch weaker on the day.

• The removal of some of last week’s French political risk premium appeared to weigh on Bunds this morning, with weakness coinciding with a second day of narrowing for German ASWs.
• Hawkish impulses from the RBA’s post-decision press conference will have also weighed at the margin.
• Yesterday’s low provided support for Bund futures, which are -16 ticks at 132.27. Recent gains have cancelled a bearish technical theme, with Friday’s high at 133.21 the first resistance.
• OAT futures are flat at 124.03, off intraday highs of 124.32.
• Eurozone final May core HICP confirmed flash estimates at 2.9% Y/Y, while the German ZEW survey was weaker-than-expected on the Expectations and Current Situation metrics.
• Neither of those data points were particularly market moving.
• The German cash curve has bear flattened, with yields flat to 3bps higher. E4bln of 2.10% Apr-29 Bobl supply was well digested.
• 10-year peripheral spreads to Bunds are tighter, owing to the aforementioned fading of some French political uncertainty.
• Today’s scheduled ECB speakers include Vujcic, Cipollone, de Guindos and Knot, while US retail sales headline the broader macro data schedule at 1330BST.