Curve Flattens As COVID Strains Risk Appetite

A very strong start to the holiday-shortened week for Treasuries, with the curve bull flattening as equities fall sharply (S&P eminis down 2.5%).

• The 2-Yr yield is down 1bps at 0.1109%, 5-Yr is down 3.7bps at 0.3447%, 10-Yr is down 5.8bps at 0.8882%, and 30-Yr is down 6.6bps at 1.6256%.
• Mar 10-Yr futures (TY) up 14/32 at 138-06 (L: 137-24 / H: 138-08)
• Concerns over very infectious COVID strain in UK combined w fears of no-deal Brexit nearing have outweighed movement in US on $900bn COVID relief + $1.4trn omnibus funding bill that are eyed to be passed today.
• To watch on that front: 0800ET House Rules Committee meets to get the ball rolling on a vote today, with full House debating the "rule" on the vote late morning/midday. Later, we get a debate and a vote in the House.
• Next is the Senate which meets at noon ET. They need all 100 to give consent to accelerate bill passage which Maj Ldr McConnell thinks will happen. Senate prob won't vote until late afternoon/early evening.
• Only data is Fed nat'l activity index at 0830ET.
• In supply, $105bn of 3-/6-month bills sell at 1130, with $24bn 20-Yr Bond auction at 1300ET. NY Fed buys ~$1.225bn of 7.5-30-Yr TIPS.