Generally Flatter On German Regional CPIs, BTPS Wider

Bund futures continue to operate above their NRW CPI-inspired lows, with the rest of the German state data released to date a little more mixed.

• German paper remains cheaper, with the data to hand pointing to a light upside surprise vs. consensus re: the headline German national CPI release. Core looks set to be in line to a touch softer vs. a loose consensus estimate.
• Upticks in preliminary Spanish CPI data generally met wider expectations.
• Bund futures -50 or so, while the major German cash benchmarks sit 3.5-5.5bp cheaper as the curve flattens.
• The bulk of the remaining EGB curves see similar flattening moves.
• Core/semi-core spreads vs. Bunds are little changed on the day.
• BTPs saw some widening pressure ahead of this morning’s sizeable supply, facilitating decent enough demand at the BTP & CCTeu auctions, although a bid has not been seen post-supply.
• ECB-dated OIS has firmed in the wake of the already released inflation data, with 14bp of tightening now showing for next month, while terminal deposit rate pricing prints just below 4.00%.