Taking their cue from the US data

EGBs and Bund are better bid this afternoon.

• With most investors looking at the ECB meeting tomorrow, Europe took its cur from the US CPI release.
• In a nutshell, US Core +0.1015% M/M unrounded, so was firmly bottom of 0.1-0.3% expected range and 0.2% median. Mainly due to drop in core goods prices, -0.2% M/M, lowest since May 2020. Core services were +0.2%, highest since Nov 2020.
• Meaning lower rates, lower yield, cheaper money., In turn, keeping Govies and Equities better bid this afternoon.
• German curve trades bull flatter, just on the margin, nothing big.
• Peripheral spreads are mostly flat to a touch wider against the German 10yr.
• The standout today, is Greece at 4.5bps tighter.
• Looking ahead, there is no data or speakers left, BUT with focus on yields, some attention on the US $38bn 10yr Auction later today.
• Bund futures are up 0.12 today at 171.35
• BTP futures are up 0.15 today at 148.91
• OAT futures are up 0.03 today at 162.04.