Large Supply and Georgia Senate Run-Offs in Focus

Market moves have been rather muted this morning with Treasuries and Bunds a little lower on the day but little movement in gilts. However, it has still be a busy day in terms of market activity and interest.

• Supply in the Eurozone is catching the eye with Italy holding a syndicated launch for a new 15-year BTP (with IPTs in excess of E72bln) and Ireland launching a new 10-year bond also via syndication with books over E40bln at writing. Germany will hold the first EGB auction of the year with a E6bln Schatz tap while Slovenia will launch a new 10-year and tap its 30-year in a dual-tranche syndication. In addition, we have seen a number of SSA and corporate borrowers kick off their 2021 funding.
• Voters will go to the polls today for the Georgia Senate run-offs. Results are unlikely to come instantly and a close contest could see us waiting until Thursday or Friday for a result. The counting is likely to follow the process seen in November with in-person votes from mainly Republican areas counted first before areas with large postal votes which are generally more Democrat-leaning likely to take longer to count.
• German retail sales came in stronger than expected this morning and the US data focus will be on the ISM later today.
• TY1 futures are down -0-3 today at 138-01 with 10y UST yields up 1.8bp at 0.932% and 2y yields up 0.2bp at 0.117%.
• Bund futures are down -0.04 today at 178.08 with 10y Bund yields up 1.0bp at -0.596% and Schatz yields up 0.3bp at -0.725%.
• Gilt futures are unch today at 135.60 with 10y yields up 1.4bp at 0.185% and 2y yields up 0.8bp at -0.155%.