It has been a bit of a mixed bag in.....>

EGB SUMMARY: It has been a bit of a mixed bag in EGB space Monday with European

periphery outshining for the whole day, while core has moved around in about a

1bp range, as market digested higher EMU core CPI and soft US data. German

10-year yield is 0.1bp lower at 0.542%, curve touch flatter

- EMU Periphery are trading strongly, with Portugal 10-year spread 5bp tighter,

while Spanish front-end and the long-end of the Italian curve are the stand out

performers Monday. Support seen due to large cash flows from both Spain and

Italy today and tomorrow, totalling E51.3bln in redemption and coupon payments.

- Eurozone flash core inflation for July surprised the market by rising to 1.2%

y/y from 1.1% in June. However overall CPI remained unchanged at 1.3% y/y.

Markets take was that overall, CPI numbers supported the ECB current stance of

waiting until the Autumn to decide on future of its QE programme. 

- It was also month-end today with Barclays projecting a large 0.12yr increase

for the eurozone, which was seen limiting the downside move in EGBs. 

- There was no Eurozone supply today, but Germany will start things off on

Tuesday before a raft of issuance on Thursday from Spain and France.