Year-End Trading in Europe Sets The Tone

Today's abbreviated session (early close at 2pm ET) is already being dominated by year-end trading.  With December marking the best month in 15 years for several sovereign benchmarks, traders are closing out positions for the year and ahead of the extended weekend (closed Monday).  European bond yields rocketed almost 10bps higher.  US Treasuries followed at a more measured pace and are now finding their footing with roughly 3bps of losses.

In the chart below, both EU and US yields occupy the same outright range on their respective axis (roughly 10bps).