European core curves are pivoting.......>

EGB SUMMARY: European core curves are pivoting slightly with the Schatz yield a

basis point lower and taking back some of the recent rise but the 30Y is around

0.5bp higher.

- The month-end extension is relatively small today and this can explain the

lack of any push to curve flattening. 

- German State CPI data are pointing to a 0.6%M/M print in the pan-German

release that will come later in the session. This would be a tenth stronger than

expected. However, Spanish December HICP has come in weak. Details in the

Eurozone M3 report showed a continued improvement in lending.

- Peripheral EGB markets started underperforming early in the session. More

recently there has been news that the Spanish Citizens Party in Catalonia will

not attempt to form a coalition (despite being the largest Party) and so this

will leave the Separatists in charge. This should have been anticipated.

- The 10Y Bund yield is close to unchanged at 0.424% and the Bund-BTP is 3bp

wider at 156bp.

- Eurex trading hours are unchanged today.