Firmer Brent Prices Weigh On Core/semi-core EGBs

Core/semi-core EGBs have drifted lower through much of today's session, even as regional market moving headline flow has remained light.

• Brent crude prices have pushed higher in afternoon trade (see our earlier post for details), which has weighed on the core FI space via higher implied inflation pricing (the 5y5 inflation swap is up 1.7bps 2.31% at typing).
• Short-end weakness has led the German and French cash curves to bear flatten on the day (vs a light bear steepening this morning).
• Bunds are -53 ticks at 132.54, having pared just over half of Friday's gains. However, the contract still sits almost 100 ticks higher versus a week ago.
• 10-year periphery spreads to Bunds are generally a touch tighter on the day.
• Tomorrow's data calendar is light, before the March flash inflation round starts with Spain on Wednesday. Our March Eurozone inflation preview will be released tomorrow.