Dems Favoured In Georgia

Increased chances of a 'Blue Wave' scenario in U.S. Congress drove price action overnight, with the U.S. Tsy curve bear steepening as a result of growing expectations re: deeper fiscal stimulus. U.S. 10-Year are yields threatening to break above the 1.00% psychological level for the first time since March at typing. T-Notes last -0-12+ at 137-14+, which represents lows of the day. While the Georgia Senate run-offs are still officially deemed too close to call by most news outlets, the composition of the votes yet to be counted has resulted in a couple of early calls for Democrat Warnock in one of the races, while the Cook Report has called victory for both Democratic Party candidates.

• As a reminder, a note released by Nomura's quantitative analysis team over the Christmas-New Year period suggested that CTAs would only start aggressively selling TY positions on a breach of the 1.02% yield level in U.S. 10-Year Tsys.
• Flow was mostly screen based, with some light downside interest in the TYG1 136.00 and TYH1 136.50 puts. There was also a 750 lot block buyer of WNH1 futures.
• Eurodollar futures sit unchanged to 2.0bp softer through the reds, with bear steepening seen across the broader strip.
• Wednesday will see focus continue to fall on the remaining vote tally in Georgia, in addition to the release of the minutes of the FOMC's December decision and the latest ADP employment reading (which of course comes ahead of Friday's NFP report).