Peripherals Outperform As Stoxx600 Reaches New Highs

Core/semi-core EGBs are firmer today, with peripherals outperforming as European equities perform strongly.

• Bunds are currently +24 ticks at 131.26. The gains in Bund over the last two days appear to be a correction, with the trend outlook remaining bearish. Bulls would need to push through the 50-day EMA at 131.85 to challenge the current bearish outlook.
• Italian 3/7/15+ year BTP supply provided the main focus this morning, and will have likely limited rallies in the run-up to the bidding deadline.
• Softer than expected Italian industrial production data prompted a brief uptick in BTP futures on release, but gains have since been pared.
• The German and French cash curves have lightly bull flattened.
• 10-year periphery spreads to Bunds trade tighter, with the Stoxx600 index reaching new record highs.
• The ECB April meeting accounts are due at 1230BST, but aren’t usually a market mover. This leaves focus on today’s US data and speakers.