Update (3:20pm): in the latest update, we are getting details on the size of the proposed Senate GOP targeted bill:

• NEW SENATE GOP TARGETED RELIEF PACKAGE WOULD COST $332.7 BLN

And since $140BN would be repurposed from unspent fund sequestered by the Treasury from the Fed…

• *SENATE GOP AID PLAN WOULD REPURPOSE $140 BLN IN UNSPENT FUNDS

… it means that the total targeted relief bill would be roughly $473 billion. Stocks are not happy with this outcome which is certainly on the low side of expectations.

* * *

Following reports this morning that a bipartisan group of senators had unveiled a “mini” $908 billion Covid stimulus plan, of which more than half of the funding ($560 billion) would be provided by Mnuchin’s clawback of Fed facilities, and which envisions small businesses getting roughly $300 billion for a version of the Paycheck Protection Program of forgivable loans and other aid, and state and local governments would get about $240 billion, including money for schools…

… there were questions if Trump would support a plan that was backed by some of his biggest Senatorial enemies:

Well, it now appears that things are starting to move, because according to the latest batch of news, McConnell said he is now getting Republican feedback on a stimulus proposal that they know President Trump will support.

McConnell said he has been in talks with House Minority Leader Kevin McCarthy, Treasury Sec. Steven Mnuchin and White House Chief of Staff Mark Meadows about virus relief to get a sense of what Trump will sign into law:

• MCCONNELL SAYS HE HAS A VIRUS RELIEF PROPOSAL TRUMP SUPPORTS
• MCCONNELL SAYS HE GOT A RELIEF PROPOSAL FROM PELOSI LAST NIGHT
• MCCONNELL SAYS NEED TO PASS A STIMULUS BILL TRUMP WOULD SIGN
• MCCONNELL SAYS MUST PASS A TARGETED RELIEF BILL THIS YEAR

More importantly, the targeted bill could lay the groundwork for a larger stimulus in 2021:

• MCCONNELL SAYS GOVT SPENDING BILL COULD BE VEHICLE FOR STIMULUS
• SENATE MAJORITY LEADER MCCONNELL SAYS THERE IS AN EXPECTATION FOR AN ADDITIONAL COVID-19 RELIEF PACKAGE EARLY NEXT YEAR

As for the bipartisan proposal, McConnell spoke to reports and said that “we don’t have time to waste time” saying that he would put together a targeted relief bill.

Shortly after McConnell’s statement, Nancy Pelosi released a statement following her call with Mnuchin on virus relief, and an omnibus bill, in which she said that “any COVID proposal must ensure that the vaccine is free and accessible to everyone.” She added that Mnuchin is reviewing the proposal that she and Schumer made to McConnell last night as well as the bipartisan Senate proposal unveiled today concluding that “additional COVID relief is long overdue and must be passed in the lame duck session.”

The movement on the fiscal stimulus front may explain the sharp move higher in yields today, which has seen 20Y and 30Y yields jump more than 10bps, pushing 2s10s and 5s30s spreads to daily wides, while the 10Y is trading as high as 0.94%.

30-year yields reach 1.677%, more than 10bp cheaper on the day and highest since Nov. 16, steepening 5s30s by nearly 5bp to highest since Nov. 17; 10-year yields cheaper by 9bp on the day at 0.93% with 2s10s steeper by 7.2bp