EM LATAM CREDIT: BTG: $ 5-Year Launch

Tsy futures trade mixed, curves twist flatter (2s10s -2.542 at 62.857) with 2s-10s weaker ahead of the $70B 5Y note auction (91282CPR6) at 1300ET, WI is currently running at 3.740%, 17.8bp cheap to last month's sale.

• November auction recap: Tsy futures held near session highs after $70B 5Y note auction (91282CPN5) tailed slightly: 3.562% high yield vs. 3.560% WI; 2.41x bid-to-cover vs. 2.38x prior.
• Peripheral stats: Indirect take-up slipped to 61.35% from 66.84% prior, direct take up 27.61% vs. 23.89% prior, while primary dealer take-up at 11.04% vs. 9.27% prior.

European curves bull flattened Tuesday ahead of the holiday period.

• Bunds modestly outperformed Gilts, with some spillover from late Monday's dovishly-received comments on rate hike prospects from ECB's Schnabel, as well as an overnight bounce in JGBs from oversold conditions.
• The rally was interrupted in early afternoon by stronger than expected US Q3 GDP data, but a subsequent recovery into the cash close would ensure bull flattening on the day.
• Periphery/semi-core EGB spreads tightened slightly, as European stocks rallied to/near historic highs in a broader risk-on move.
• A reminder that Wednesday sees a shortened session for Gilts and options/futures contracts and an EGB cash holiday due to Christmas Eve, with the 25th and 26th full day holidays. Normal trade resumes on Monday.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.6bps at 2.142%, 5-Yr is down 2.1bps at 2.464%, 10-Yr is down 3.5bps at 2.862%, and 30-Yr is down 4.4bps at 3.488%.
• UK: The 2-Yr yield is down 0.3bps at 3.742%, 5-Yr is down 1bps at 3.966%, 10-Yr is down 2.7bps at 4.509%, and 30-Yr is down 3.3bps at 5.238%.
• Italian BTP spread down 1.1bps at 69.1bps / French OAT down 1.1bps at 70.4bps  

• US TSY TO SELL $80.000 BLN 8W BILL DEC 24, SETTLE DEC 30