Brexit and payrolls in focus

Bonds are currently under pressure after the recent headline from Reuters that an EU source had told them that barring any last-minute breakdown in talks a Brexit trade deal should be reached by the end of the weekend. Curves have been bear steepening.

• Brexit headlines are likely to remain the biggest catalyst today with 10 December the effective deadline in order to get a trade deal ratified before the transition period ends on 31 December.
• The other main event of the day will be the US employment report with nonfarm payrolls expected to rise 475k.
• This morning the UK DMO published its issuance calendar for Jan-Mar which included the launch of a new conventional 5-year via auction, conventional 25-year via syndication, index-linked 10-year via auction and long-dated index-linked syndication. For more details see bullets at 7:34GMT, 7:47GMT and 7:51GMT.
• TY1 futures are down -0-1+ today at 137-19+ with 10y UST yields up 2.3bp at 0.930% and 2y yields up 0.6bp at 0.158%.
• Bund futures are up 0.07 today at 175.01 with 10y Bund yields up 0.2bp at -0.555% and Schatz yields down -0.4bp at -0.747%.
• Gilt futures are up 0.02 today at 133.96 with 10y yields up 0.8bp at 0.329% and 2y yields up 0.7bp at -0.46%.