Inflation

Inflation - EUR

The long end of French inflation underperformed today as the AFT confirmed plans for a long-waited new 15y OATi.

Bund ASWs have tightened despite big EU supply that sources say saw reasonable demand.

BEs took an early dip until buyers swept in at the morning lows to leave them mixed but little change at the close.

Euro inflation was better-offered for most of the session, according to traders, as flash HICP slowed and Spain sold more of the SPGBei-33.

A multitude of headwinds kept BEs under pressure into today’s modest month-end bid while the inflation basis has been better bid of late.

The euro inflation curve steepened but forwards still slipped from recent highs after Spanish HICP printed weaker-than-expected and oil prices fell.

Euro inflation curve steepening on weaker energy helped long forwards reach fresh cycle highs. Inflationistas become foodies as HICP data approach.

Front-end BEs are falling today as RYs rise amid better-than-expected data and continuation of the debt impasse. Some see 30y RYs getting attractive.

Unlike yesterday, debt ceiling angst finally caught up with BEs, with dealer marking them lower amid RY selling.

BEs weathered the latest debt impasse as well as some Fed hawk-talk well as the energy complex helped support the inflation curve.

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