Brexit talks continue to dominate

Very little movement in core fixed income or peripheral spreads in early European trade. The focus today will remain on Brexit, with fishing seemingly the last major obstacle to an EU-UK trade deal but still proving contentious. Overnight reports have stated that rather than negotiating with Barnier, Johnson is now negotiating directly with von der Leyen who is in frequent contact with EU Heads of State. There is still hope that a deal can be agreed before Christmas although we are now also starting to see some comments from senior officials that talks can continue until the end of the year, or even in January if necessary.

• TY1 futures are unch today at 137-31+ with 10y UST yields down -0.6bp at 0.912% and 2y yields up 0.1bp at 0.118%.
• Bund futures are up 0.22 today at 178.15 with 10y Bund yields down -0.8bp at -0.605% and Schatz yields down -0.4bp at -0.747%.
• Gilt futures are up 0.05 today at 135.64 with 10y yields down -0.2bp at 0.179% and 2y yields unch at -0.155%.