BUNDS: US Court ruling drives the cross asset price action

• There's very little change for the German Bund, and also multi cross assets (Equities, FX), Bund and US Tnotes have seen some of their lowest traded Volumes for their Overnight sessions in quite some time, a busy Week ahead on the Data front, US earnings, and also Month end.
• The German GFK was better than expected, but not a known market mover, Bund is bid on Cash led flows, but all in very small.
• Small resistance moves down to 131.63, but the Main upside target is unchanged at 132.03, while support is unchanged at 130.75.
• Today sees, Spain prelim CPI/GDP. ECB Inflation Expectations, US Prelim Wholesales, and JOLTS.
• SUPPLY: Italy €3.5bn 2030 (equates to 19k BTP or 73k 2yr short BTS), Italy €4bn 2035 (equates to 38.7k BTP) that's heavy Italian supply, will weigh, UK 2054 Linker (won't impact Gilt).
• SYNDICATION:  Finland, and France.
• SPEAKERS: ECB Cipollone, Villeroy, BoE Ramsden.

Recap: Spanish March HICP inflation confirmed flash estimates at 2.22% Y/Y (vs 2.89% prior). As expected, energy (specifically electricity) inflation dragged on the headline reading, falling to 1.71% Y/Y (vs 8.58% prior). 

• Excluding energy and unprocessed foods, HICP inflation was 2.00% Y/Y (vs 2.11% prior). Services inflation pulled back two tenths to 3.11% (vs 3.33% prior). Decelerations in medical, recreation/culture services and package holidays were somewhat offset by an uptick in transport services and accommodation.
• Non-energy industrial goods inflation remains subdued, but ticked up to 0.20% from 0.02% prior.
• The proportion of ECOICOP sub-components with annual inflation rates between 1-3% ticked up to 30% from 27% in February. 

For reference, Spain represents 12% of the Eurozone-wide HICP basket in 2025.

Tomorrow we will see the national-level prints from France, Italy and Germany; our full April EZ HICP preview is here. 

Spain April inflation is due at 08:00BST / 09:00CET today. Our full April Eurozone HICP preview is here. 

• BBG Consensus:
  • HICP: 2.0% Y/Y (vs 2.2% prior), 0.3% M/M
  • CPI: 2.0% Y/Y (vs 2.3% prior), 0.4% M/M
    • Core CPI: 2.3% Y/Y (vs 2.0% prior)
• Analyst views:
  • Goldman Sachs sees HICP 2.0% headline, core 2.5%. Higher “core services component driven by travel-related, transport and other services, where we expect the rail transport component to continue to unwind the January drop and airfares to print at 2.5%mom nsa”.
    • “Energy inflation to decline to -2.5%yoy from 1.7%yoy in March, driven by a base effect and further sequential deceleration in electricity prices, and incorporating the diesel tax”.
  • Morgan Stanley also sees 2.0% headline HICP, with “energy prices to be the main driver to the downside over the month (-3.7%M) due to a steep drop in electricity prices (-6.0%M), as well as a reduction in fuels and lubricants prices (-2.9%M)”. In contrast, they expect “food inflation to pick up (+0.8%M), as is usually the case around April”, while core inflation “should also show signs of strength due to the delayed timing of Easter this year”.
    • MS “expect core HICP to pick up, reaching 2.5%Y from 2.2%Y in March, while core CPI, which includes processed food, should also rise to 2.4%Y from 2.0%Y. This is largely driven by “Recreation and Culture”, which we see rising by 1.4%M from March to April, significantly higher than last year’s print at -0.5%M.”