EURIBOR OPTIONS: Longer dated call spread

March month-to-date Johnson Redbook Retail Sales were up 5.7% Y/Y as of the March 8 week.

• As such the series continues to point to solid overall "official" retail sales going into March (the Redbook series represents 80% of  the equivalent Census Bureau retail sales series) roughly consistent with the previous 9 months of nominal Y/Y retail sales in the "official" monthly series of between 2-4% and perhaps at the high end of that range for control group retail sales.
• February retail sales data is out March 17 (early consensus is for 0.8% M/M growth after January's 0.9% contraction).
• There is a note of caution noted in the Redbook report though with a later Easter in 2025 vs 2024 potentially distorting future ("retailers suggest averaging the sales comparisons from both months [March and April] to generate a combined growth rate"), while "retailers are closely monitoring a 40-day boycott of Target that began on March 5, a week-long boycott of Amazon that started on March 7, and a boycott of Nestlé scheduled to begin on March 21, among other actions."

US President Donald Trump has escalated a trade war with Canada, increasing tariffs on Canadian metals set to take effect at 00:01 ET on March 12, in response to Ontario Premier Doug Ford's decision to hike the price of electricity exported to Michigan, Minnesota, and New York by 25%. 

• Trump said on Truth Social: "I have instructed my Secretary of Commerce to ad an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA... This will go into effect [March 12th]."
• Trump added: "I will shortly be declaring a National Emergency on Electricity within the threatened area. This will allow the U.S to quickly do what has to be done to alleviate this abusive threat from Canada. If other egregious, long time Tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the Tariffs on Cars coming into the U.S. which will, essentially, permanently shut down the automobile manufacturing business in Canada."
• Trump repeated a regular comment that Canada should become the 51st US state, likely to inflame relations with Prime Minister designate Mark Carney: "This would make all Tariffs, and everything else, totally disappear," Trump said.
• Ford said yesterday: “I will not hesitate to increase this charge. If the United States escalates, I will not hesitate to shut the electricity off completely,”
• Quebec Premier François Legault has also indicated he is exploring a similar move with Politico noting that New York, "imported 7.7 terawatt hours of power from Ontario and Quebec last year — more than any other state."

We've just published our preview of the February CPI report, due for release on Wednesday March 12 at 0830ET.

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