Looking To Georgia

Core FI has looked through the latest round of headlines re: Sino-U.S. tensions, which represented at least a marginal de-escalation as the NYSE walked back its previously declared intentions re: the de-listing of 3 large Chinese telecoms firms. T-Notes stuck to a narrow 0-03+range, last -0-01+ at 138-02+, while the cash Tsy curve saw some light bear steepening, with 30s cheapening by ~1.0bp in Asia-Pac hours. Indonesia's marketing of 10-, 30- & 50-Year USD bonds caught some attention, while light instances of downside screen interest via USG1 136.00 puts and EDU2/U4 steepeners dominated on the flow side, as participants await the results of Tuesday's Georgia Senate run-offs.

• As a reminder, the Tsy curve was subjected to some twist steepening pressure on Monday, although the long end recovered from intraday cheaps as defensive flows became evident across broader markets. The mixture of the COVID situation in the U.S. & Europe, continued political angst in the U.S. and OPEC+ squabbling ultimately provided support after a sharp move lower in early NY trade, which may have been linked to the return of IG issuance after the Christmas/NY hiatus with broader selling flow seen in the futures space. T-Notes ultimately finished around best levels of the day as equities weakened during the first session '21 (mostly driven by the aforementioned factors). Elsewhere, 10-Year breakevens printed above 2.00% for the first time since 2018, finishing (marginally) above that level on a closing basis.
• The ISM m'fing survey and aforementioned Georgia Senate run-offs headline on Tuesday (although most have suggested that we may not see conclusive results in Georgia for a few days), while Fedspeak from Williams & Evans is also due.