It sold €1.3bn in securities maturing in 2016 at 0.53pc, compared with 1.05pc at the June sale. France also sold €3.51bn in five-year debt at an average yield of 0.98pc, up from 0.86pc on July 19. 09.57 Nicholas Spiro of Spiro Sovereign Strategy said there is a "surreal" air to Spanish debt auctions at the moment, with the sales being well received mainly because investors expect Madrid to eventually request an ECB-backed bond-buying programme: The relative ease with which the Treasury issued bonds today, and 10-year paper at that, says much about the enduring "Draghi effect." The ECB's verbal intervention alone is, for the time being, shoring up Spanish debt. Not only did the Treasury exceed its target today but the covers were fairly decent and the yield on the closely watched 10-year bond fell markedly. 09.52 Spain has got its bond auction away. The country beat its target of €4.5bn, raising €4.8bn. Spain sold the 10-year bonds at an average yield of 5.666pc, compared with 6.647pc at an auction on August 2. Spain sold €859m of 10-year bonds and €3.9bn of a new three-year issue. The average yield on the 2015 bond was 3.845pc. 09.47 Samuel Tombs from Capital Economics had this to say on the UK retail sales figures: August's UK retail sales figures add to the evidence that the Olympics did not provide the hoped-for boost to spending on the high street. Retail sales volumes fell by 0.2 percent on the previous month, led by drops in sales of household goods (down 2.7 percent) and in department stores (down 0.7 percent). Admittedly, some of this weakness may be temporary. While August's 2.5 percent monthly rise in petrol prices squeezed the amount of money left over for discretionary spending, the recent fall in oil prices suggests that petrol prices could soon fall back a touch. What's more, it may be that August's drop in sales simply reflected households spending more off the high street during the Games, for example in hotels and restaurants. And even after this drop, retail sales were still 0.6 percent higher than three months ago, suggesting that they are likely to contribute to a brief return to positive GDP growth in the third quarter. Nonetheless, with consumer confidence still very weak and inflation set to outpace earnings growth for another six months or so, we would not be surprised to see further falls in retail sales in the coming months. 09.35 With shoppers watching the Olympics, UK retail sales ticked down in August. Data from the Office for National Statistics shows that sales volumes including petrol dipped 0.2pc on the month; that is not quite as bad as economists had expected, however - they had thought sales would dip 0.4pc. Online sales took a particularly bad hit, falling 6.7pc compared to July - the sharpest decline since December 2007. 09.26 Another day, another summit. EU and Chinese leaders are meeting in Brussels today to try to bridge growing differences over trade and find common ground on tackling the debt crisis. Chinese companies are increasingly investing in Europe, while the Chinese government is an important buyer of the debt of eurozone governments. At the same time, trade disputes are intensifying. In the latest spat, the European Commission accused China of selling solar panels below cost on the EU market, angering Beijing and threatening wider business ties. An EU official played down any troubles ahead of the summit, which he said would not be a summit for big decisions but rather a meeting focused on "consolidation." 08.59 France did not fare quite so well, however. Markit's flash PMI showed that the country's private sector output suffered its sharpest decline since April 2009. In September, output fell to 44.1 from 48 in August, marking a 41-month low. Services activity dropped to 46.1 from 49.2 and manufacturing declined to 42.6 from 46. Jack Kennedy, senior economist at Markit, commented: French private sector output slumped in September, falling at the steepest rate in nearly three-and-a-half years. All the more concerning was the fact that new business and employment also showed accelerated declines, while service providers" future expectations slipped into negativity for the first time since early 2009. 08.55 Data this morning from Markit shows that German private sector output came close to stabilising in September. It ticked up to 49.7 in September from 47 during August, although anything below 50 still marks a contraction rather than an expansion. But, activity did strike a five-month high and activity in the services sector rose to 50.6 in September from 48.3 in August, a four-month high. Tim Moore, senior economist at Markit, said: Germany managed to shake off the summertime blues in September, with renewed services growth helping to stabilise private sector output as a whole. Manufacturing also made a contribution to the slightly less gloomy picture, albeit simply by achieving a slower contraction of production compared to August. 08.20 With the pain in Spain worsening, Reuters reports this morning that the crisis is fanning Catalan separatism. The wire reports that popular momentum for independence has never been stronger in Catalonia, a wealthy region in north-eastern Spain that generates one-fifth of the country's income: More than half of Catalans say they want a separate state, and hundreds of thousands marched in Barcelona last week - the biggest such show of separatist fervour. Still, few see a rapid road to an independent Catalonia, a dream rooted in the Middle Ages when Barcelona was a Mediterranean trade centre with a parliament. It's going to be a difficult and long process ... For us to get it they would have to have a referendum, and they're not going to give us that," said Jose Maria Prats, a nurse who joined the march. The upsurge in Catalan separatism is founded on a conviction that Madrid is draining the region financially. The central government collects most taxation payments then redistributes them to Spain's 17 self-governing regions, which run their own schools and hospitals. Each year Catalans say they pay 16 billion euros more in taxes than the regional government spends. The crisis has shown that Spain's regional financing model does not work. There is no doubt we need to advance towards a federal system of taxation," said Jose Ignacio Conde-Ruiz, deputy head of think-tank FEDEA. 08.05 One of the key events today will be a Spanish bond action, with the crisis-hit country trying to raise €4.5bn with an auction of 10-year debt. The auction comes after a bill sale on Tuesday drew good demand, but saw yields remain stubbornly high. Markus Huber of ETX Capital commented: Mid morning all eyes will be on important Spanish bond auctions constituting a good measure just how worried investors are concerning Spain still not having agreed to a bail-out package.