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Tsys Track EGBs Lower, New Yield Curve Highs Post-ECB Annc

US TSYS SUMMARY
Rates traded mixed into Thursday's close, yield curves steepening to new multi-year levels (5s30s 142.71, level not seen since Nov 2016).
  • First full day for Pres Biden, rolling out more executive actions (BIDEN POISED TO FREEZE OIL AND COAL LEASING ON FEDERAL LAND, Bbg) with main focus on grappling with Covid-19 response, says things still likely to get worse before they get better, est's death toll >500k by end of Feb.
  • Early kick-start, Tsys followed EGBs lower: focus on "upward inflation pressure as economy recovers" ECB PM Lagarde headlines in post ECB steady rate annc. Volumes surged, yield curves bear steepened.
  • Strong auction/aggressive bid: US Tsy $15B 10Y-TIPS auction (91282CBF7), high yield -0.987% (compared to -0.867% prior) vs. -0.972%% WI; 2.68 bid/cover vs. 2.71 prior. Note, record size Tsy auctions next wk: $60B 2Y, $61B 5Y and $62B 7Y.
  • Aside from deal-tied positioning, Heavy Eurodollar futures Blocks: 12.5k 2Y bundles +0.0075 after 7.5k Whites -- may be related to talk ICE will annc end of LIBOR date early next week.
  • The 2-Yr yield is down 0.4bps at 0.123%, 5-Yr is up 0.5bps at 0.4454%, 10-Yr is up 2.6bps at 1.1058%, and 30-Yr is up 4.1bps at 1.8706%.
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