Bunds and Treasuries moved higher in...>

BOND SUMMARY: Bunds and Treasuries moved higher in the Asian session as risk

sentiment deteriorated due to the further spread of the coronavirus across China

and confirmation of human-to-human transmission of the virus. Gilts also opened

higher.

- Bunds and USTs have held on to the majority of their gains but gilts are only

marginally higher on the day following better than expected labour market data.

Wage growth fell back less than expected while employment grew faster than

expected. This data was for November so was of course prior to the election

result, but the fact that the labour market was remaining resilient should be of

some comfort to MPC members who are due to vote next week on whether to cut

rates or not. However, the data is likely to be less important than the more

timely Agents/ Decision Makers Surveys and the PMI which is due for release on

Friday.

- BTPs are the clear underperformers today but other than Italy being threatened

over its digital tax plans from the US, there appear to be no real drivers

today. 10y spreads are 4.5bp wider on the day.