Tsys Weaker Despite Twist In Fiscal Saga

An unexpected twist in the ongoing fiscal saga has done little to dampen holiday spirits, with Treasuries heading lower in overnight trade, alongside higher equities.

• The 2-Yr yield is up 0.4bps at 0.1169%, 5-Yr is up 0.5bps at 0.367%, 10-Yr is up 0.8bps at 0.9247%, and 30-Yr is up 1.3bps at 1.6609%.
• Mar 10-Yr futures (TY) down 1.5/32 at 137-30 (L: 137-29 / H: 138-03)
• Tsys had risen following Pres Trump's threat late Tuesday not to sign the relief/funding Bill passed by Congress - unless the $600 in payments to individuals is boosted to $2k - setting up another potential gov't shutdown Dec 28 and a delay of relief funding.
• Lots on the agenda, here's the a basic state of play: Trump is expected to veto the National Defense Authorization Act today; House Democrats will try to approve $2k stimulus checks tomorrow via unanimous consent; the House is set to return to session on Dec 28 and the Senate on Dec 29 to override Trump's defense veto.
• Data includes a big slate at 0830ET: Nov durable goods, Nov personal income/spending, and weekly jobless claims. Nov new home sales and Final UMich sentiment at 1000ET.
• In supply, $55B of 105-/154-day bills sell at 1130ET, with 2Y FRN re-open at 1300ET. NY Fed buys ~$6.025B of 4.5-7Y Tsys.