MNI ASIA MARKETS ANALYSIS: Dallas Fed Mfg Data Weak

HIGHLIGHTS

• Treasuries look to finish near late session highs, curves bull steepening (2s10s +4.412 at 52.737) after decent front end buying and 2s10s steepener blocks/crosses.
• Dallas Fed's Texas Manufacturing Survey for April was the weakest since the start of the Covid pandemic in 2020, as tariff uncertainty weighed heavily on manufacturers in the district while price pressures remained elevated.
• Treasury's latest borrowing / financing requirements estimates were slightly higher - but broadly in line with - MNI's estimates: $514B for the Apr-Jun quarter, and $554B for the Jul-Sep quarter.
• A lack of concrete details surrounding the US administration’s progress on trade deals has allowed the broader dollar weakening trend to resume.

MNI US TSYS: Near Late Highs, Curves Bull Steepening, Borrow Estimates Rising

• Treasuries look to finish near late session highs Monday, curves bull steepening (2s10s +4.412 at 52.737) after decent front end buying in 5s and 2s10s steepener blocks/crosses.
• Jun'25 10Y futures breach resistance at 111-25 (50.0% retracement of the Apr 7 - 11 bear leg) to 111-30.5 high (+14), focus on next resistance at 112-12 (61.8% retracement of the Apr 7 - 11 bear leg).
• Underlying bid as Dallas Fed's Texas Manufacturing Survey for April -- the weakest since the start of the Covid pandemic in 2020, as tariff uncertainty weighed heavily on manufacturers in the district while price pressures remained elevated.
• Meanwhile Treasury's latest borrowing / financing requirements estimates were slightly higher - but broadly in line with - MNI's estimates: $514B for the Apr-Jun quarter, and $554B for the Jul-Sep quarter.
• A lack of concrete details surrounding the US administration’s progress on trade deals has allowed the broader dollar weakening trend to resume, Bbg US$ index at 1219.81 (-6.24) after the bell.

REFERENCE RATES (PRIOR SESSION)
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US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 4.33% (+0.04), volume: $2.565T
• Broad General Collateral Rate (BGCR): 4.32% (+0.04), volume: $1.055T
• Tri-Party General Collateral Rate (TCR): 4.32% (+0.04), volume: $1.023T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $112B
• Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $298B

FED Reverse Repo Operation

RRP usage rebounds to $148.649B this afternoon from $94.021B last Friday. Usage had fallen to $54.772B last Wednesday, April 16 -- lowest level since April 2021. Conversely, usage had surged to the highest level since December 31, 2024 on Monday, March 31: $399.167B. The number of counterparties at 38.

US SOFR/TREASURY OPTION SUMMARY

Option desks reported mixed flows Monday, SOFR leaning towards upside calls, Treasury options revovled around low delta puts. Underlying futures finishing near late session high (TYM5 at 111-30, +14). as such, projected rate cut pricing has gained momentum vs. morning levels (*) as follows: May'25 at -2.7bp (-1.9bp), Jun'25 at -16.7bp (-15.4bp), Jul'25 at -38.1bp (-35.6bp), Sep'25 -58.7bp (-54.6bp).

SOFR Options:
-4,000 SFRH6/0QH6 98.00 call spds, 0.75 midcurve over
-5,000 SFRZ5 95.37/95.50/95.87 1x call flys, 6.25 vs. 96.59/0.17%
Block/screen, -12,000 SFRN5 96.50/97.00 call spds, 7.0 ref 92.265
-2,000 SFRZ5 98.00/99.00 call spds, 4.5
over +40,000 SFRZ5 95.68 puts, 4.0
+5,000 SFRZ5 97.25 calls, 15
-6,000 0QU5 97.50/98.00 call sppds, 7.0 vs. 95.86/0.10%
+30,000 0QU5/0QZ5 97.50/98.00 call spd spd, 2.0 net flattener
6,000 3QK5 96.62/96.87 call spds ref 96.49
1,500 SFRN5 96.31/96.50 call spds ref 96.245
1,250 2QM5 96.81/97.06 call spds ref 96.725

Treasury Options:
10,000 Wed weekly 111.75/112.25 call spds, 13 ref 111-27.5
1,500 TYM5 110.5 puts vs. 112/113 call spds ref 111-23.5
2,500 TYM5 111.75 straddles, 143 ref 111-24
+12,500 TYM5 110.5/111.5 2x1 put spds, 1 net vs 111-17.5/0.10%
Block, 7,500 TYM5 110 puts, 20 vs. 111-12.5/0.25%
+6,000 TYM5 111 puts, 40 vs. 111-14/0.41%
10,000 TYM5 107 puts, 2 ref 111-13
15,000 TYM5 106/107 put spds
over 5,800 TYM5 109 puts 8 last
over 5,000 TYM5 109.5/110.5 put spds, 14 ref 111-16
5,900 TYM5 113 calls, 20 ref 111-15.5

MNI BONDS: EGBs-GILTS CASH CLOSE: Bear Steepening Ahead Of Euro Inflation

European yields backed up slightly Monday, reversing the modest declines seen Friday.

• Various factors weighed on core FI in a session that was devoid of market-moving data (Spanish Q1 unemployment saw a notable uptick).
• These factors included slightly more positive risk-on tone on US tariffs coming in from the weekend, and reports Monday morning of a Ukraine proposal for a full 30-day ceasefire with Russia.
• While a widespread Spanish and Portuguese energy blackout made headlines, the market impact was limited.
• The German and UK curves both bear steepened, though Schatz/Bobl notably underperformed their UK counterparts.
• Periphery/semi-core EGBs were mixed and little changed on the day.
• The April Eurozone flash inflation round starts Tuesday with Spain - MNI's preview is here.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 2.3bps at 1.742%, 5-Yr is up 4.2bps at 2.059%, 10-Yr is up 5.2bps at 2.521%, and 30-Yr is up 5.8bps at 2.947%.
• UK: The 2-Yr yield is up 0.8bps at 3.866%, 5-Yr is up 1.2bps at 3.986%, 10-Yr is up 3bps at 4.509%, and 30-Yr is up 5.1bps at 5.27%.
• Italian BTP spread up 0.3bps at 110.8bps  / Spanish spread up 0.6bps at 66bps

MNI EGB OPTIONS: Busier Than Usual Session For Sonia, Especially Call Structures

Monday's Europe rates/bond options flow included:

• RXM5 130/129 put spread, paper pays 23 in 5.9k
• 2RZ5 97.25/97.00 put spread, paper sells for 2.75 on 10k
• SFIK5 95.85/95.90/96.00/96.05c condor, sold at 2.5 in 2.5k
• SFIK5 96.20/96.30cs, bought for 1 in 2k
• SFIM5 95.75/95.85/95.95c fly, sold at 2.5 down to 2.25 in 6k
• SFIU5 96.35/96.6/96.85c fly, bought for 4.5 in 7k

MNI FOREX: JPY, CHF and GBP Outperform as Greenback Loses Ground

• The dollar has traded on the backfoot Monday amid a bull steepening move for treasuries and renewed modest pressure on major US equity benchmarks. This has particularly benefitted the Japanese yen and Swiss Franc, while GBP is also among the best performers in G10. A lack of concrete details surrounding the US administration’s progress on trade deals has allowed the broader dollar weakening trend to resume, although the plethora of data this week and month-end could provide obstacles to short-term sentiment.
• For USDJPY, tests of the 144 handle have capped the topside for now, and moving average studies are in a bear-mode position highlighting a dominant downtrend. As such, USDJPY has been edging steadily lower across Monday, printing fresh session lows around 142.40 as we approach the APAC crossover. Key short-term technical parameters are seen at 144.47, the 20-day EMA, and 139.89, last week’s low.
• USDCHF held the prior breakdown point well last week around 0.8333 and late weakness towards the 0.82 mark also appears to be confirming last week’s pullback as corrective.
• GBPUSD is notably back above 1.34 and spot trades in close proximity to the 1.3424 bull trigger (as well as 1.3434, the Sept'24 high). This is a key medium-term area for cable and it will be eagerly monitored in coming sessions. Further strength would signal scope for a move towards 1.3500 Round number resistance and 1.3550, the Feb 24 ’22 high.
• Price action has prompted EURGBP to trade through a major support area we flagged last week at 0.8520-31 - marking both the early April pullback low as well as the 50% retracement of the tariff-inspired upleg off 0.8323.
• Downward pressure on equities has relatively hindered the progress for the likes of EUR, AUD and NZD. However, EURUSD is pushing back above 1.14 in late trade and AUDUSD is within 20 pips of a cluster of highs from last week around 0.6435, which represent four-month highs for the pair.
• Eurozone inflation data kicks off Tuesday, and in the US, JOLTS and consumer confidence data are highlights.

MNI FX OPTIONS: Larger FX Option Pipeline

• EUR/USD: Apr30 $1.1375-95(E2.4bln); May01 $1.1270(E1.1bln), $1.1500(E1.0bln)
• USD/JPY: Apr30 Y140.50($1.7bln), Y142.00($1.7bln), Y145.00($1.5bln); May01 Y143.00($1.2bln); Y147.50($1.2bln)
• AUD/USD: Apr30 $0.6115(A$1.1bln)

MNI US STOCKS: Late Equities Roundup: Energy & Utility Shares Lead Gainers

• Stocks are mixed late Monday, off second half lows as markets trade in a quiet narrow session range. Currently, the DJIA trades up up 69.08 points (0.17%) at 40181.55, S&P E-Minis down 7.25 points (-0.13%) at 5542.75, Nasdaq down 66 points (-0.4%) at 17316.22.
• On the positive side, Energy and Utility sector shares led gainers in late trade: Eversource Energy +2.11%, EQT Corp +1.90%, Vistra Corp +1.60%, AES Corp +1.49% and Evergy +1.40%.
• Separately, pharmaceutical and health care stocks traded firm with Centene Corp +3.00%, AbbVie +2.92% and Gilead Sciences +2.65%.
• Paring last week's gains, Information Technology and Consumer Discretionary sectors continued to underperform in the second half, semiconductor makers weighing on the IT sector: NVIDIA -3.17%, Micron Technology -2.18%, Zebra Technologies -1.85%, First Solar -1.74% and QUALCOMM -1.42%.
• E-commerce and autos weighed on the Discretionary sector with Tractor Supply -2.70%, eBay Inc -1.85%, Chipotle Mexican Grill -1.44%, Amazon.com -1.36% and Tesla -1.24%.
• Expected earnings announcements after today's close: Alexandria Real Estate, Cadence Design, SBA Comm, Crown Holdings, Welltower, Solaris Energy, Noble Corp, Brown & Brown, Nucor Corp, Teradyne Inc, Universal Health Services, EZCORP and Waste Management Inc.

MNI EQUITY TECHS: E-MINI S&P: (M5) Monitoring Resistance At The 50-Day EMA 

• RES 4: 5837.25 High Mar 25 and a bull trigger    
• RES 3: 5773.25 High Apr 2      
• RES 2: 5622.38 50-day EMA and a key resistance
• RES 1: 5563.00 Intraday high                              
• PRICE: 5548.00 @ 1539ET Apr 28  
• SUP 1: 5355.25/5127.25 Low Apr 24 / 21 and a key support                      
• SUP 2: 4996.43 76.4% retracement of the Apr 7 - 10 bounce
• SUP 3: 4832.00 Low Apr 7 and the bear trigger
• SUP 4: 4760.88 1.618 proj of the Feb 19 - Mar 13 - 25 price swing 

The corrective bull cycle in S&P E-Minis that started on Apr 7, remains in play. The contract traded higher last week and breached a number of important short-term resistance points. Price has cleared the 20-day EMA and pierced 5528.75, the Apr 10 high. The next key resistance is 5622.38, the 50-day EMA. A clear breach of this EMA would strengthen a bull theme. Initial key support lies at 5127.25, the Apr 21 low. A break would be bearish.

COMMODITIES

MNI AMERICAS OIL: WTI crude is lower today

April 28 - Americas End-of-Day Oil Summary: WTI crude is lower today amid improved sentiment for a Ukraine peace agreement adding to existing pressure from demand concerns and increasing OPEC+ supply. Further sanctions on Iran cast doubt over progress in US-Iran talks, while the return of Greek shipowners to Russia’s Urals oil market should help support Russian loadings.

• Putin announced a ceasefire across May 7-11 for Victory Day. Ukraine has not agreed to the ceasefire, saying it is ready to abide by a ceasefire of at least 30 days.   
• US Treasury Secretary Scott Bessent said trade negotiations “are moving along very well, especially with the Asian countries.”
• The US and Iran talks showed signs of progress after a third round of talks which were increasing detailed discussions according to the Iranian foreign minister.
• The US Treasury added three shipping/trading companies and three vessels to its Iran-related sanctions list on April 28.
• Several OPEC+ members want to approve another accelerated oil output increase for June at their meeting on May 5, Reuters said last week.
  • WTI June futures were down 1.5% at $62.05
  • WTI July futures were down 1.5% at $61.36
  • RBOB May futures were down 0.6% at $2.11
  • ULSD May futures were up 0.4% at $2.18
  • US gasoline crack up 0.4$/bbl at 25.89$/bbl

TUESDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
29/04/2025	0600/0800	*	DE	GFK Consumer Climate
29/04/2025	0600/0800	**	SE	Private Sector Production m/m
29/04/2025	0600/0800		SE	Flash Quarterly GDP Indicator
29/04/2025	0600/0800	**	SE	Retail Sales
29/04/2025	0700/0900	**	SE	Economic Tendency Indicator
29/04/2025	0700/0900	***	ES	HICP (p)
29/04/2025	0700/0900	***	ES	GDP (p)
29/04/2025	0700/0900		EU	ECB's Cipollone On Financial and Trade Fragmentation
29/04/2025	0800/1000	**	EU	M3
29/04/2025	0800/1000	**	IT	ISTAT Consumer Confidence
29/04/2025	0800/1000	**	IT	ISTAT Business Confidence
29/04/2025	0800/1000	**	EU	ECB Consumer Expectations Survey
29/04/2025	0900/1100	*	EU	Consumer Confidence, Industrial Sentiment
29/04/2025	0900/1000	*	GB	Index Linked Gilt Outright Auction Result
29/04/2025	0940/1040		GB	BOE Ramsden At Innovate Finance Global Summit
29/04/2025	1230/0830	**	US	Advance Trade, Advance Business Inventories
29/04/2025	1255/0855	**	US	Redbook Retail Sales Index
29/04/2025	1300/0900	**	US	S&P Case-Shiller Home Price Index
29/04/2025	1300/0900	**	US	FHFA Home Price Index
29/04/2025	1300/0900	**	US	FHFA Home Price Index
29/04/2025	1400/1000	***	US	Conference Board Consumer Confidence
29/04/2025	1400/1000	***	US	JOLTS jobs opening level
29/04/2025	1400/1000	***	US	JOLTS quits Rate
29/04/2025	1430/1030	**	US	Dallas Fed Services Survey
30/04/2025	-		JP	Bank of Japan Meeting
30/04/2025	2350/0850	*	JP	Retail Sales (p)
30/04/2025	2350/0850	**	JP	Industrial Production
30/04/2025	0130/0930	***	CN	CFLP Manufacturing PMI
30/04/2025	0130/0930	**	CN	CFLP Non-Manufacturing PMI
30/04/2025	0130/1130	***	AU	CPI inflation
30/04/2025	0130/1130	***	AU	CPI Inflation Monthly
30/04/2025	0145/0945	**	CN	S&P Global Final China Manufacturing PMI