Off Cheaps, BTPS Lag Despite Smoothly Digested Supply

Bunds move back from worst levels as equities plateau, as the latter consolidates the early run higher (the cash Euro STOXX 50 index is the best part of 1.4% firmer on the day), while a light flattening impulse across the ECB-dated OIS strip provides some cushion and the smooth passage of Italian supply removes a further headwind. That leaves Bund futures ~20 ticks firmer on the day, while the major German cash benchmarks are 1.5-3.0bp richer, as the belly outperforms. The remainder of the core/semi-core EGB curves see similar moves, while peripherals are biased a touch wider, with BTPs still underperforming on the day. The impending ECB decision provides the macro focal point today.