Treasury Market Outlook: global markets are mixed

Treasury Market Outlook: global markets are mixed as they assess recent developments on possible vaccines against rising virus cases and tightening restrictions. Meanwhile, some central bankers have cautioned overly optimistic expectations on a recovery. Positioning and deal making have impacted too. Profit taking on record highs on the broader U.S. indexes has weighed on the Dow and S&P 500 futures which are -0.5% and -0.4% lower, while the NASDAQ mini is about 0.34% higher. European bourses are mostly in the red with the FTSE down -1.08% and the DAX off -0.28%. Asian shares saw the Nikkei closed with a 0.4% gain and the Shanghai -0.2% lower. Treasuries have a bid with longer rates about 2 bps richer with the bond at 1.64% and the 10-year at 0.888%. The Gilt is down 1.2 bps at 0.334% and the Bund is off 0.6 bps at -0.552%. Tesla shares jumped more than 10% on the announcement that the company will join the S&P index on December 21. In Europe, fiscal stimulus will remain key and the EU's ambitious plan for a jointly financed recovery fund was put on hold yesterday as Poland and Hungary objected to plans that would see payouts linked to the adherence to the EU's rules of law. Meanwhile there were positive Brexit headlines suggesting that possible landing zones on key issues are coming into view. In the U.S., fundamentals come into view with reports on retail sales, production, trade prices, the NAHB housing index, TIC data and chain store sales. There is Fedspeak from Chair Powell, Barkin, Bostic, Daly, Kashkari, and Rosengren. Retailer earnings are slated and a beat by Walmart has supported but Kohl's missed.