The Bund contract started poorly but....>

EGB SUMMARY: The Bund contract started poorly but the absolute and net movements

have been extremely limited today, mainly down to a lack of market-moving

information.

- Overnight, the US dismissed the North Korean implied declaration of war but

there was no response from North Korea. 

- Italian paper came under some pressure early in the day but peripheral markets

are making a come-back and we hear of real money interest in the 5-10Y area of

the Spanish curve today.

- Italy successfully sold E3.0bln combined of CTZ and BTPei paper; the strongest

interest showed up in the 5Y linker. 

- Germany saw very strong demand for its fairly new Sep-19 Schatz. This auction

result has aided a additional increase  of the Schatz invoice spread. Since the

German election result, this spread has jumped from 51bp to 54.3bp.

- French business confidence was the only economic release of note but stayed at

109 in September compared to expectations for a small rise.