Softer After Strong Performance Last Week

Core/semi-core EGBs are a touch softer to begin the week after rising every day last week, with little in the way of notable headline flow or data to set the tone. Flash inflation releases in Spain, France and Italy highlight this week's regional calendar, with the German and Eurozone-wide figures due after the Easter Break.

• The German and French cash curves have lightly bear steepened.
• Bunds are -22 ticks at 132.85 with cumulative volumes below average for this time of day. Technically. a short-term bull cycle remains in play, with key support defined at 131.23 (Feb 29 low).
• 10-year peripheral spreads to Bunds are generally little changed on the day, with Italian/Greek spreads a little wider and Spanish/Portuguese spreads a touch tighter.
• Friday's rating reviews saw Fitch affirm Portugal at A- (Outlook Stable), while Scope revised Spain's Outlook to Positive from Neutral, maintaining its rating at A-. See our earlier post for more details.
• Spanish February PPI was -8.2% Y/Y due to energy base effects, and was not a market mover.
• The remainder of today's regional calendar is light, with ECB hawk Holzmann scheduled to speak at 1030GMT/1130CET.