It was a decent start for the Bund......>

EGB SUMMARY: It was a decent start for the Bund market but German debt ran into

some profit-taking early on. That said, the yield curve is still making a small

bull flattening move with the 10Y Bund down 0.7bp to 0.528%. 

- The first of the German State July CPIs came from Saxony and rose by a

consensus-beating 0.3% M/M, assisted by a 14.7% monthly rise in package

holidays. 

- French provisional CPI for July matched the consensus -0.4%M/M, +0.8%Y/Y but

French consumer spending numbers for June weakened 0.8% on the month and was a

bigger drop than expected. 

- For once, Italian debt is not outperforming, possibly because the market is

preparing for the Italian auction later this morning. Italy sells a new 5Y, the

10Y BTP bmk and the CCTeu bmk.

- Equity markets are weakening in Europe, particularly the CAC-40 that has

already shed 1.1%. Most other markets are fairly clam.