Firmer But Still Short Of Wednesday’s Highs

Core/semi-core EGBs have rallied sharply morning, with this week’s main risk events now out of the way.

• Soft Chinese trade data and ongoing geopolitical tensions have supported the space, though futures remain below Wednesday’s pre-US CPI high.
• This morning, the hawkish leaning Kazaks noted that rates would be cut in June absent any surprises, while the dovish Stournaras re-iterated his preference for 4 rate cuts in 2024.
• The ECB’s Q2 Survey of Professional Forecasters expectations for inflation were unchanged through 2024 – 2026, while German, French and Spanish final March inflation figures broadly confirmed respective flash estimates.
• Bunds are +107 ticks at 132.41, while OAT and BTP futures are +110 and +117 ticks respectively.
• German cash yields are 6.5bps to 8.5bps lower today, with the 5/10s outperforming.
• Periphery spreads to Bunds are off narrowest levels but remain tighter today, with European equity futures almost 1% higher.
• Final March Eurozone HICP headlines next week’s calendar, alongside several scheduled ECB speakers (many of whom are attending the IMF Spring Meetings in Washington DC).