A Soft Start

T-Notes offered in early trade this week, with the contract breaching last week's lows, last -0-05+ at 136-15+, perhaps with some focus on President-elect Biden's stimulus comments at the backend of last week. A reminder that today's Japanese holiday means cash Tsys will be closed until London hours. The Asia-Pac docket is light, with weekend news flow continuing to focus on the U.S. political sphere, a Japanese variant of COVID-19 and Sino-U.S. tensions surrounding Taiwan.

• T-Notes went out near worst levels of the day/week on Friday. Cash trade saw unchanged to cheaper closes, as 10s once again represented the weak point on the curve (+~3.5bp), with focus on a softer than expected round of NFPs (with the service sector providing the notable drag on the headline reading), while the participation rate held steady, leaving unemployment unchanged and underemployment a touch lower. Positive revisions also accompanied the Dec headline reading, while AEH were stronger than exp. On the flow side the highlights were a FV block buy and TY/WN curve flattener.
• Comments from Fed Vice Chair Clarida were noted, as he stressed that "the prospects for the economy in 2021 and beyond have brightened and the downside risk to the outlook has diminished." In the wake of the recent Fedspeak surrounding tapering matters Clarida noted that the time to slow the Fed's pace of bond buying lies somewhere "well down the road," and that he sees the Fed maintaining the current rate of its Tsy purchases through '21.
• Elsewhere, some back and forth surrounding comments from Democrat Senator Manchin re: the prospects of his support for $2,000 stimulus checks created some chop late in the day, while President-elect Joe Biden on Friday called for trillions of dollars in immediate further fiscal support, including direct payments (further announcements re: this will be made later this week). Talk of a U.S. COVID-19 variant also did the rounds late on Friday, although subsequent press reports released over the weekend tried to play down such suggestions.