The 10Y German Bund yield is slightly...>

EGB SUMMARY: The 10Y German Bund yield is slightly lower in early morning London

trading with light volumes in the futures markets. Many have attributed the rise

from the European open to the weak Chinese Caixin PMI data, with fears that the

Chinese data are generally pointing down. 

- There was no market reaction to news late yesterday that Jay Powell is

nominated to be the next Fed Chair, this news was widely telegraphed beforehand.

The 10Y Bund yield is trading 1.4bp lower at 0.358% and the German curve is

flatter with the 15-30Y part of the curve outperforming the most.  

- Italian BTPs are well bid today, which appears to be part of a longer term

theme with the peripheral market bonds. The Bund-BTP spread has been tightening

since mid-Oct and is 0.4bp today at 142.0bp. The Bund-Bonos spread is trading

almost unchanged at 111.3bp. Irish debt appears unfazed by the US tax plan,

which includes a cut in US corporate tax rates to 20% from 35%. Ireland's tax

rate is a more competitive 12.5%.

- Markets are likely to remain quiet with not much in the way of economic data

being released in the Eurozone. US payrolls is later.