US TSYS: Bonds Reverse Early Gains, Risk Off Consolidation?
Mar-04 20:59
- Treasuries look to finish mostly lower Tuesday, curves twisting steeper (2s10s +5.578 at 25.717) as Bonds lead reversal off this morning's highs (USM5 tapped 119-18 high, tapped 118-00 after the bell).
- Move partially tied to rebound in stocks off lows during the same period of time, Nasdaq firmly in the green before making a late retreat ahead of the close. Another factor was a retreat in Bunds amid reports officials were proposing a E500B "whatever it takes" defense fund.
- No substantive data Tuesday, "I do factor in some effect of tariffs on inflation on prices. I do think we're going to see that later this year," Williams told a Q&A at a Bloomberg Invest event.
- Focus turns to President Trump addressing the joint session of Congress tonight at 2100ET. Followed by ADP private employ data tomorrow morning at 0815ET.
- Late session chatter that President Trump looks to announce a late term minerals deal with Ukraine after all.
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FOREX: USD Surges At Monday Open On US Tariff Implementation
Feb-02 20:47
Early Monday G10 FX trends are heavily favored for the USD, following the weekend tariff announcements from the US administration. The weekend announcement will see 25% tariffs levied on Mexico and Canada, along with 10% on China, starting this Tuesday (see this BBG link). Tariffs on Canada energy exports will be set at a lower 10%.
- Canada has already detailed retaliation plans, which will be done in two phases. Firstly on around on around C$30bn worth of US exports, then a larger product list in a few weeks (around C$125bn per BBG). Mexico and China have vowed a response, but have yet to release any specifics.
- USD/CAD spiked to fresh highs, 1.4749, but was last 1.4725/30. This was fresh highs back to 2003. EUR/USD is also down over 1%, last 1.0240 (earlier lows were 1.0141.
- AUD/USD is at 0.6155/600, slightly up from session lows. We are off 1%, while NZD/USD is down 0.90%, to 0.5580/85.
- USD/CNH is up to 7.3600, 0.50% weaker in CNH terms.
- Yen is outperforming, likely on safe haven related demand. USD/JPY was last sub 155.00, the only G10 currency firmer against the USD so far today.
CANADA STILL CONSIDERING TAX ON OIL EXPORTS TO US- OFFICIAL
Feb-02 18:26
- CANADA STILL CONSIDERING TAX ON OIL EXPORTS TO US- OFFICIAL
FED: Powell To Deliver Semi-Annual Testimony In Mid-Feb
Jan-31 21:48
The House Financial Services Committee's website confirms that Fed Chair Powell will deliver his semi-annual Monetary Policy Report on Wednesday Feb 12 at 1000ET.
- The Semi-annual testimony will be closely eyed as Powell's first scheduled appearance since the January FOMC - and the House testimony on the 12th is the same day as the release of January CPI (and the week after nonfarm payrolls and benchmark revisions) so will be of particular interest.
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