EUROPEAN FIXED UPDATE: Slightly softer trade ahead of US supply

Gilts: -29 ticks, 92.20

• Opened lower by two ticks but has since slipped slightly to a 92.17 trough in thin conditions with newsflow essentially non-existent for the UK.
• In a 92.17-46 band, which takes a tick below the 92.18 base from last Friday, beneath that the 91.87 contract trough from last Thursday which printed as Gilts reacted to the FOMC from the night before.
• As a reminder, due to it being Christmas Eve, Gilts close at 12:30GMT.

USTs: +4 ticks, 108-18

• Essentially flat in an extremely narrow 108-16 to 108-19+ band while the curve is, at the margin, steepening. As above, catalysts are light though the docket ahead is more interesting.
• Supply due with a 2yr FRN and a 5yr Note auction, taps which follows Monday’s 2yr which was somewhat mixed in holiday-thinned conditions. No reaction to the sale.
• Elsewhere, Richmond Fed Manufacturing survey due just after the Redbook.
• Ahead, it remains to be seen if any concession emerges into the US supply. If it does, then we look to support at 108-15 which is the contract base from Monday