Core bonds are largely unchanged so....>

BOND SUMMARY: Core bonds are largely unchanged so far today with Bund futures

reversing some early losses. Peripheral spreads are a little tighter, but there

have been no huge reactions to the EU Summit deal in fixed income space.

- Early this morning the EU agreed its budget proposals for the period 2021-27

and announced the details for its Covid recovery plan. The final recovery plan

package includes EUR390bln of grants and EUR360bln of loans to give a total size

of EUR750bln. 70% of the Recovery and Resilience Facility (RRF) which makes up

the lions share of the EUR750bln and of this 70% will be committed in 2021 and

2022 with the final 30% in 2023. A deal was expected eventually, hence the lack

of major market reaction, but the fact a deal has been agreed at this (albeit

extended) Summit and not been let to drag on further is a positive.

- Markets will go back to watching Covid case numbers in some US states, any

progress on a vaccine. Lagarde speaks tomorrow but there is little of note on

the data calendar until US claims on Thursday and flash PMIs on Friday.

- TY1 futures are up 0-0+ today at 139-13 with Bund futures unch at 176.37 and

Gilt futures down -0.04 at 137.85.