Futures Close To Session Highs Following Dovish STIR Feed Through

Core/semi-core EGBs trade at session highs as moves in STIR/ECB-dated OIS markets support the wider FI space, following dovish ECB communication this morning/over the weekend.

• Bank of Portugal Governor Centeno struck a familiarly dovish rhetoric in a RTRS interview released this morning (echoing a similar sentiment to that first reported by MNI before the turn of the year. See here)
• This added to weekend comments from BdF's Villeroy (who is seen as being more reflective as the ECB consensus), who noted "everything will be open at our next meetings".
• The above comments have seemingly outweighed hawkish pushback from Knot and Kazimir, while Vice President de Guindos struck a balanced tone similar to last week's ECB presser.
• Bunds are +79 ticks at 135.08 at typing. A clear break of 135.02 (Jan 26 high) is required to ease bearish pressure. OAT and BTP futures are also around +80 on the day.
• The German and French short-ends lead the rally and promote a bull steepening dynamic, with 2/5-year yields 8-9bps lower today.
• Periphery spreads are generally tighter, with the exception of GGBs.
• Syndication mandates for a new 30-year DBR benchmark and 10-year GGB have just been announced. MNI expects the German 30-year to have a size of E3-4bln, and the Greek 10-year a size of E3.0-3.5bln.
• Today's regional calendar is light, with the week's main focus on the January flash inflation data round (though Q4 '23 flash GDP prints and manufacturing PMI readings will also garner attention). ECB's de Guindos is scheduled to speak again (1310GMT).