Remain Lower Following Strong UK CPI and ECB Pushback

Core/semi-core EGBs have have moved off lows set in early trade, though still sit lower on the day.

• Initial hawkish impulses came from a higher-than-expected UK CPI readings, alongside further ECB policymaker pushback on current rate cut pricing.
• In an interview this morning ECB's Lagarde said it is likely that the Bank will cut rates by the summer, although she warned that "too optimistic" markets (re: cuts) hinder the return of inflation to its 2% goal
• The ECB's pre-meeting blackout period begins tomorrow, with a wide range of policymakers across the hawk/dove spectrum having pushed back on current pricing already this week.
• Bunds are 17 ticks lower at 134.79, after bouncing off the Dec 8 low and key support of 134.37 earlier.
• The German and French curves have twist flattened, pivoting at 10Y tenors. In the former's case, rate cut repricing at the short-end factored more heavily than the 30Y supply in the run-up to the bidding deadline.
• Periphery spreads to Bunds show either side of unchanged on the day.
• December final HICP confirmed flash estimates, with little else on the local data docket today. There remains a raft of ECB-speak from Davos scheduled, alongside US retail sales data this afternoon.