Softer As Lane's Friday Comments Are Digested

Core/semi-core EGBs are off lows but remain softer to start the week, with Friday's comments from ECB's Lane seemingly being digested over the weekend.

• A reminder that today is a US market holiday, which may limit volumes/liquidity through the European close.
• Friday afternoon saw ECB's Lane - usually on the dovish end of the Executive Board - push back on the notion of fast rate cuts. He reiterated the ECB's view that rate cuts will only be considered once the full set of Q1 national accounts data is available, which will be by the June meeting at the earliest.
• Lane's comments were largely glossed over by markets at the time, amid the softer-than-expected US PPI print.
• Meanwhile, further US/UK strikes on Houthi-related targets in Yemen over the weekend have not prompted significant safe-haven flows into core FI thus far.
• That leaves Bunds -20 ticks at 135.47, with 134.87 the first support. The recent move below the 20-day EMA highlights scope for a deeper correction, opening key support at the Dec 8 low of 134.37.
• German and French curves have bear flattened, while periphery spreads to Bunds are up to 2bps wider.
• Today's data docket is light. November IP data was not a market mover. ECB hawk Holzmann appears at the World Economic Forum at 1415 GMT / 1515 CET.