UK CPI Provides Some Outright Support, GGB Tightening The Standout

Bunds have stabilised within the range asset around the UK CPI data, which allowed the contract to tick away from initial technical support at 129.30 (which held to the tick), after a show below yesterday’s base.

• German cash benchmarks twist steepen, running 2bp richer to 0.5bp cheaper, with the shorter end underpinned by feedthrough from the aforementioned UK data.
• Core/semi-core 10s are little changed to a touch tighter vs. Bunds.
• Peripherals are flat to tighter, with Greek outperformance noted around the smooth passage of the latest round of benchmark 10-Year GGB supply (10-Year GGBS tighten 8bp vs. Bunds on the day). 10-Year BBG/Bunds remains off cycle tights.
• 10- & 30-Year BTP yields have stabilised below 4.50 & 5.00% respectively.
• ECB speak will be eyed through the remainder of the session, although risk-taking capability/appetite will likely be curtailed ahead of the impending FOMC decision across the Atlantic.