Firmer Despite Fiscal Progress

T-Notes ticked away from Friday's closing levels at the re-open, grinding higher as we worked our way through Asia trade, before edging off best levels. The impact of the COVID-19 situation in the UK/Brexit dynamics outweighed the progress on the domestic fiscal front (Congress is set to vote on the fiscal package on Monday), although e-minis initially ticked higher, paying more attention to the latter, before pulling back. The weekend also saw the approval of Moderna's COVID-19 vaccine for emergency use in the U.S. T-Notes last +0-05 at 137-29, with cash Tsys 0.6-2.2bp richer across the curve, as 10s see some mild outperformance.

• T-Notes went out around worst levels on Friday, with 20s providing the weak point on the cash curve, cheapening by 1.5bp come the bell, in what proved to be a limited pre-festive season session as participants waited for clarity re: familiar risk matters. Late headline flow on Friday featured the latest escalation in Sino-U.S. tensions (although this was telegraphed) & the easing of restrictions surrounding U.S. banks conducting share buybacks (although they will still be subject to some limitations). Elsewhere, Fed Vice Chair Clarida noted that further fiscal support would help the economy through a "rough" couple of months, while he stressed that monetary policy is just where it should be.
• Eurodollar futures -0.5 to +1.0 thru the reds. With a 5.0K seller of EDZ1/H3 seen in Asia.
• 20-Year supply and the Chicago Fed national activity index headline locally on Monday.