US: Support For Iran War Continues To Fall Among US Voters - CNN

European bonds sold off for a second day on the Middle East conflict.

• A further surge in energy prices saw European front-end instruments sell off sharply in early trade once again, with 2Y yields up 15-20bp in the UK and Germany at one point.
• Gilts also saw a bit of additional pressure after the UK's Spring Statement brought a slightly higher-than-expected issuance target.
• Yields came off session highs going into the cash close, on a Reuters report that the US was considering supporting insurance for oil tankers in the Mideast, which helped oil prices pull back.
• While intraday losses were pared, on the day the German curve bear flattened, with the UK's seeing broad weakness and Gilts underperforming Bunds overall.
• Periphery/semi-core EGB spreads widened sharply as equities declined, with BTPs underperforming.
• Wednesday's agenda includes final PMIs and multiple ECB speakers including Villeroy and Muller.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 6.6bps at 2.155%, 5-Yr is up 5.2bps at 2.379%, 10-Yr is up 4bps at 2.752%, and 30-Yr is up 2.8bps at 3.386%.
• UK: The 2-Yr yield is up 9.6bps at 3.734%, 5-Yr is up 8.6bps at 3.961%, 10-Yr is up 9.7bps at 4.471%, and 30-Yr is up 9bps at 5.174%.
• Italian BTP spread up 5.9bps at 70.3bps / French OAT up 5.5bps at 64.1bps

Swiss February CPI is expected to slow down to 0.0% Y/Y in February, which would be the joint lowest print since last November.

• A consensus print in the last inflation release ahead of the March 19 SNB meeting would mean CPI sits at the lower bound of the 0-2% SNB inflation target, but keep average Q1 CPI to date within a close range of the the 0.1% SNB forecast from December.
• In addition to domestic and services inflation, where the SNB sees medium-term inflationary pressure centred around, focus this time is also on the imported measure (-1.6% Y/Y Jan) which will show to what extent franc appreciation this year has already filtered through to Swiss prices.
• This comes on the back of Monday's statement from the SNB, here again ad verbatim: "In light of international developments, our readiness to intervene in the foreign exchange market has increased. We are prepared to intervene in the foreign exchange market to curb a rapid and excessive appreciation of the Swiss franc, which would jeopardize price stability in Switzerland."
• Also, housing inflation will see its quarterly update, the category has seen a material slowdown over past quarters, sitting at 1.6% most recently (down from a 4.0% peak in Q3'24). 

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