Off Highs But Remain Firmer Today; Little Impact From ECB Wage Data

Core/semi-core EGBs have moved away from intraday highs but remain firmer on the day.

• ECB Q4 negotiated wages softened to 4.5% (vs 4.7% prior), but markets were unmoved given the lagging nature of the indicator. For the ECB, the Q1 '24 data (due in May) will be most pertinent to gauge when the policy easing cycle can begin. ECB-dated OIS contracts currently price the first full 25bps rate cut by the June meeting, with 31bps of cuts priced.
• Otherwise, headline flow has been relatively light. Today's sovereign supply slate (GBP1.75bln 40y Gilt, E5bln 2y Schatz, Italian exchange auction and 10y EU bond syndication) will have helped cap rallies through the morning.
• In the Asia-Pac session, main impetus was the larger than expected 25bp reduction in the 5-Year LPR.
• Bunds are +36 ticks at 133.21 at typing. Schatz futures are just +3 ticks higher, with today's Schatz supply weighing at the short-end. The German cash curve has bull flattened as a result.
• Periphery spreads to Bunds are mixed, with the 10-year BTP/Bund spread -0.9bps tighter at 148.2bps and the 10-year PGB/Bund spread 1.1bps wider at 74.8bps.
• The remainder of today's regional docket is quite light, with today's BoE speakers at the Treasury Select Committee potentially garnering some cross-market interest.