Core FI Come Under Pressure As Trump Administration Agrees To Begin Transition

T-Notes extended Monday losses after U.S. General Services Administration recognised Joe Biden as the "apparent winner" of the presidential election and gave a green light for starting the formal transition process. The news provided further support to broader risk appetite, on top of yesterday's positive Covid-19 vaccine headlines & Biden's decision to pick ex-Fed Chair Yellen to become Tsy Sec in his administration. When this is being typed, T-Notes trade -0-01+ at 138-08+. The contract slipped as news wires circulated the GSA's decision and established itself sougth of yesterday's worst levels. Cash Tsy curve has bear steepened a tad. Eurodollar futures trade unch. to +0.5. Focus in the U.S. turns to local Conf. Board Cons. Conf. & 7-Year debt supply.

• Japanese markets re-opened after a holiday, digesting the net positive news flow from over the long weekend. JGB futures re-opened lower and slid further, pressured by the aforementioned news on White House transition. The contract last changes hands at 152.10, 12 ticks shy of last settlement. Cash JGB yield curve underwent a degree of steepening. There was little of note in the latest address from BoJ Gov Kuroda, while local news flow revolved around Japan's coronavirus situation and its fiscal ramifications, with a Sankei report suggesting that the gov't might adopt a third extra budget exceeding Y20tn. Elsewhere, the BoJ left the sizes of its 1-10 Year JGB purchases unchanged.
• Aussie bonds shrugged off a speech from RBA Dep Gov Debelle on "Monetary Policy in 2020", which added little fresh to the recent RBA speak. YM -0.5 & XM -4.5, the latter steadied after slipping in reaction to the aforementioned transition headlines. Cash ACGB curve has bear steepened, with yields sitting 0.1-5.1bp cheaper. Bills trade unch. to -2 ticks through the reds. The AOFM auctioned A$150mn worth of 20 Sep '25 I/L Bonds, while Australia's preliminary trade data for the month of Oct revealed an increase in exports, driven by record shipments of iron ore.