United States S&P/Case-Shiller Home Price Indices (YoY) registered at 2.5% above expectations (2.2%) in July

Societe Generale’s Kenneth Broux observes Bunds and Bonos retracing from recent yield highs despite a strong upside surprise in Spain’s CPI. The bank warns that if this inflation pattern is replicated across the Euro area, risks are skewed to an upside surprise in core HICP. Bund short-covering and yield dips are seen as potentially shallow, with topside levels at 3.70%/3.74% and support at 3.54%.