OIL: Crude Prices Slump Further as China Retaliates with 84% U.S. Tariff

Goldman Sachs write that “with 2.5-to-3 Fed cuts priced for 2025 we think SFRZ5/Z6 bear flatteners are a useful structure that positions for cut risk to shift out the curve but insulates from the risk of front-loading in the event of more meaningful growth weakness”. They prefer to express this via an options play and recommend buying SFRZ5 96.25 puts vs. 0QZ5 96.25 puts

• "The EU has mandated BofA Securities, Credit Agricole CIB, DZ BANK, Goldman Sachs Bank Europe SE and Santander as Joint Lead Managers for its upcoming EUR Fixed Rate RegS Bearer new 10-year benchmark due 12th December 2035. There will be a co-lead group comprised of Commerzbank, Danske, Intesa, KBC, MPS, UBS. The transaction will be launched tomorrow, subject to market conditions. "
• Note that the last 10-year EU-bond launch at syndication (Feb 2024) saw E7bln sold. We see upside risks to this and pencil in E7-10bln (although think it's likely we see the bottom half of this range).

• Treasuries have pared Friday’s post-Powell (and Kugler) losses amidst broader risk-off moves with equities under pressure either side of the Atlantic.
• Factors include continued U.S. growth worry and signs of tension within the German fiscal negotiations as the Greens grow a little louder when it comes to voicing some lingering areas of dissent.
• It’s a lighter start to this week’s macro docket, with US policy headlines likely in the driving seat, whilst Wednesday’s US CPI report looms large. NY Fed inflation expectations are likely watched more closely than usual considering the recent spike in the U.Mich equivalent, a survey with partisanship issues.
• Cash yields are 4.4-6.8bp lower with the belly leading the day’s declines.
• 2s10s at 30.4bps (near unch) very roughly consolidates the early March steepening to one-month highs.
• TYM5 at 111-01+ (+15) sits close to session highs on solid cumulative volumes of 500k, although has remained firmly within Friday’s range with its post-payrolls high of 111-11+.
• Friday’s high marked a push closer to resistance at 111-15 (Mar 5 high) after which lies 112-01 (Mar 4 high) which recent declines have been deemed corrective before support at 110-12+ (Mar 6 low).
• Data: NY Fed consumer inflation expectations Feb (1100ET, 1500GMT)
• Bill issuance: US Tsy $76B 13W & $68B 26W bill auctions (1130ET)