Treasury Market Outlook: stocks extended gains overnight

Treasury Market Outlook: stocks extended gains overnight, finding ongoing support from vaccine hopes. The formal transition to a Biden presidency also added to the positive tone. The Dow mini is up 0.9% after the index rallied 1.1% yeaterday, and the S&P 500 future is 0.75% higher as cyclicals and and value are favored. The tech heavy NASDAQ continues to lag with a 0.29% gain. The FTSE is up just over 1% and the DAX is up 0.94%. The Nikkei returned from holiday and climbed 2.5%. Chinese shares underperformed with the CSI -0.6% lower amid reports the Trump administration is pushing for more hardline measures against Beijing. Bonds are little changed to cheaper on the strength in risk appetite. The 10-year Treasury rate is up 1 bp to 0.864% while the 2-year is quiet at 0.160%. The Gilt is fractionally cheaper at 0.314%, and the Bund is 0.4 bps higher at -0.579%. Antipode bonds underperformed with NZ climbing over 10 bps and the Aussie up 4.5 bps to 0.887% on a proposal that the RBNZ start targeting house prices. RBA's Debelle warned against ending stimulus too early. Concurrently, BoJ's Kuroda said the central bank will take additional easing steps if the impact of virus developments becomes more severe. The German Ifo index plunged to 90.7, the weakest since July, while Q3 GDP was revised higher, but there were little market impacts. Today's U.S. calendar includes consumer confidence, home price data, and the Richmond Fed index. The Treasury sells 7-year notes and a 2-year FRN. For Fedpeak, Bullard and Williams are on tap. The earnings calendar features Medtronic, Vmware, Autodesk, Dell, Analog Devices, Best Buy, HP, Hormel Foods, Dollar Tree, Burlington Stores, J.M. Smucker, and Autohome.