Firmer, Looking Elsewhere For Cues Ahead Of Supply

Core EGBs lack a clear, specific driver and are seemingly happy to look to the pre-CPI bid in U.S. Tsys and the richening in Gilts for general direction.

• Final Spanish CPI generally matched expectations/prelim data (the core M/M was firmer than expected), while results from the previously outlined EGB supply will come soon.
• Bund futures are the best part of 40 ticks higher on the day, sticking within yesterday’s range, while 5s outperform on the German cash curve, where 2-4bp of richening is seen across the major benchmarks.
• Similar moves have been seen across the bulk of the core/semi-core curves.
• GGB/BTP outperformance is noted amongst 10-Year peripherals, aided by an uptick in equities and the general richening theme, while the fact that GGB supply is now in the rear-view will be aiding GGBs.