MNI ASIA MARKETS ANALYSIS: Sentiment Shits Slightly Positive

HIGHLIGHTS

• Treasuries look to finish higher Monday, stocks rebounding late as markets took possible exemptions to tariffs on imported vehicles and parts as a positive amid otherwise ongoing trade policy uncertainty.
• Fed Gov Waller called for "flexible" monetary policy while also maintaining his view that the inflationary effects of tariffs are likely to be temporary.
• Projected rate cuts did indeed gain slightly Monday, with approximately 60bp priced in by the September meeting, and 86bp by December.

MNI US TSYS: Sentiment Gradually Improves on Possible Auto Tariffs

• Treasuries looked to finish near late Monday highs (TYM5 +30.5 at 110-22, yield -.1176 to 4.3720%), stocks firmer despite ongoing tariff uncertainty. Information Technology sector shares still lead gainers in late trade despite ongoing tariff uncertainty after Trump denied that US officials said smartphones, computers, and other consumer electronics were excluded from tariffs over the weekend.
• "There was no tariff exception" announcement Trump said, while officials are "looking at chips, whole electronics supply chain; chips to be assessed in national Security tariff probes." Nevertheless, "markets very strong once they got used to tariffs" Trump posted Monday.
• Sentiment improved after midday on a couple items: Pres Trump said he was "exploring possible exemptions to his tariffs on imported vehicles and parts" while Fed Gov Waller called for "flexible" monetary policy while also maintaining his view that the inflationary effects of tariffs are likely to be temporary.
• Initial greenback weakness was exacerbated by a more optimistic tone for risk sentiment, assisted by the tariff reprieves for key tech products (released late on Friday). This allowed the USD index to edge back towards Friday’s cycle low of 99.01. 5-year treasury yields are 14bps lower on the session, providing an additional dollar headwind.
• Looking forward to Tuesday's data calendar: Empire Manufacturing and Import/Export Price Index data at 0830ET followed by US Tsy $48B 52W & $70B 6W bill sales at 1130ET.

SOFR FIXES AND PRIOR SESSION REFERENCE RATES
​​​​​​​
SOFR Benchmark Settlements:

• 1M -0.00093 to 4.32093 (+0.00202 total last wk)
• 3M +0.00444 to 4.26054 (-0.00288 total last wk)
• 6M +0.01528 to 4.11328 (-0.02752 total last wk)
• 12M +0.03749 to 3.88879 (-0.01193 total last wk)

US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 4.33% (-0.04), volume: $2.584T
• Broad General Collateral Rate (BGCR): 4.32% (-0.04), volume: $1.046T
• Tri-Party General Collateral Rate (TCR): 4.32% (-0.04), volume: $1.007T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $105B
• Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $275B

FED Reverse Repo Operation

RRP usage rebounds to $102.838B this afternoon from $98.531B on Friday. Usage had surged to the highest level since December 31, 2024 last Monday, March 31: $399.167B. Compares to $58.770B (lowest level since mid-April 2021) on February 14. The number of counterparties at 34.

US SOFR/TREASURY OPTION SUMMARY

Option desks reported mixed SOFR & Treasury option flow Monday, a pick-up in downside SOFR puts in the second half - faded the steady rise in underlying futures. Treasury options more pared but appeared to lean toward call buying and vol sales. Underlying futures quietly extending highs in late trade. Little change in projected rate hike pricing: current levels vs. this morning  (*) as follows: May'25 at -5p (-5.75bp), Jun'25 at -22.3bp (-21.6bp), Jul'25 at -41.1bp (-39.4bp), Sep'25 -59.7bp (-55.8bp).

SOFR Options:
+10,000 SFRZ5 95.37/95.62 put spds, 1.5 ref 96.515
+5,000 SFRZ5 95.37/95.62 put spds, 1.5 ref 96.51
Block, 5,000 SFRZ5 95.50/95.62/95.75 put flys, 1.0 ref 96.51
1,500 SFRM5 95.56/95.62/95.68 put tree ref 95.925
Block, 5,000 SFRU5 95.43/95.75 put spds, 3.0 ref 96.26
+5,000 0QN5 96.81/96.93/97.68/97.81 call condors, 3.25 ref 96.67
-3,500 SFRU5 96.00 puts (x4) vs SFRZ5 97.00/98.00 call spds, 3.0 net, Sep over
-4,000 SFRK5 95.81 puts, 4.25 ref 95.905
+5,000 SRN5 95.87/96.00 put strip, 14.5-15.0 ref 96.22
-3,000 0QU5/0QZ5 96.00 put strip, 27.5 (legs covered)
-3,000 SFRM5 95.68/95.87 put spds vs. 95.905/0.27%
-5,000 SFRK5 95.75/95.87/96.00 put flys, 2.75 ref 95.91
3,000 0QQ5 97.00/97.50/98.00 call flys ref 96.655
1,500 0QM5 97.00/97.25 call spds ref 96.655
3,000 SFRM5 95.81/0QM5 96.12 put spds
5,000 SFRU5 95.62/96.06 put spds ref 96.25

Treasury Options: 
2,500 USK5 117/118 call spds, 5 ref 114-08
1,500 USK5 114.5/115.5/116 1x3x2 broken call flys
4,000 TYM5 114/115.5 call spds, 7 ref 110-08
3,100 FVM5 106/106.5 put spds vs. 108.5/109 call spds ref 107-20.75
4,500 TYK5 109.5/111.5 strangles, 37
8,000 TYM5 111/113 call spds, 24 ref 110-03
over 11,800 TYK5 110 puts, wide range from 49 to 38 last
over 15,300 TYK5 111 calls, 18 ref 110-05
-7,000 TYK5 106.75 puts, 3-2 ref 109-31.5
3,000 USK5 109/112 put spds
4,000 FVM5 108/108.5/109/110 broken call condors ref 107-17
4,500 FVM5 106 puts, 18 last
2,000 Mon wkly 111/112 call spds 

MNI BONDS: EGBs-GILTS CASH CLOSE: BTPs, Gilts Outperform

European bonds strengthened across the board to start the week, with Gilts outperforming Bunds.

• Price action was indicative of a relief rally, with mixed messages over the weekend on sectoral US tariff exemptions seen as a moderate positive development.
• That helped Treasuries stabilize from their recent sell-off, spilling over into the European space.
• A stabilization in US consumer's long-term inflation expectations evident in a New York Fed survey helped trigger another leg of gains, with Bund / Gilt futures finding new session highs into the cash close.
• The UK curve bull flattened substantially, with Germany leaning likewise.
• BTPs outperformed on the EGB periphery, benefiting from Friday's S&P ratings upgrade to BBB+ (stable) from BBB.
• Focus for the week remains on UK Feb/Mar Labour Market *Tuesday) and Mar Inflation (Wednesday) data, and the ECB meeting Thursday.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 3bps at 1.759%, 5-Yr is down 5.8bps at 2.074%, 10-Yr is down 5.8bps at 2.512%, and 30-Yr is down 1.4bps at 2.877%.
• UK: The 2-Yr yield is down 3bps at 4.018%, 5-Yr is down 5.7bps at 4.153%, 10-Yr is down 9.3bps at 4.66%, and 30-Yr is down 13.2bps at 5.384%.
• Italian BTP spread down 7.7bps at 116.5bps / French OAT down 4.6bps at 75.4bps  

MNI EGB OPTIONS: Euribor Call Structures Prevalent As ECB Week Begins

Monday's Europe rates/bond options flow included:

• ERM5 98.0625/98.125/98.1875c fly, bought for half in 4k
• ERM5 98.00/98.12cs 1x1.5, sold the 1 at -0.5 in 6k
• ERM5 97.75/97.87cs 1x1.5, bought the 2 for 4 in 6k.
• SFIK5 95.95/96.10cs, bought for 3.75 in 4k

MNI FOREX: EURGBP Slides 1% Ahead of UK Labour Market Figures

• In a similar, albeit less volatile session to Friday, there dollar has seen significant two way price swings, culminating in broad dollar indices ticking lower on the day. Initial greenback weakness was exacerbated by a more optimistic tone for risk sentiment, assisted by the tariff reprieves for key tech products (released late on Friday). This allowed the USD index to edge back towards Friday’s cycle low of 99.01. 5-year treasury yields are 14bps lower on the session, providing an additional dollar headwind.
• However, the USD did find a base as the more constructive tone in equity markets soured through the US session. Price action was best exemplified by USDJPY, which had a punchy 207 pip range. After gapping higher at the open to levels around 144.30, USDJPY then steadily sold off, seeing the pair reach as low as 142.24 before stabilising. Despite the impressive moves for US yields on the day, the pair holds closer to 143.00 as we approach the APAC crossover.
• The best performers in G10 are NZD, GBP and NOK. NZDUSD has risen just shy of 1% Monday, and the recovery seems to have boosted by further short covering above 0.5850. Spot has returned to levels last seen in December, just below the 0.5900 mark.
• Overall, with reciprocal tariffs delayed, GBP is rallying well - underscoring GBP's correlation with risk - which looks through only marginal tweaks to monetary policy pricing. Technically, moving average studies remain in a bull mode position that highlights a dominant uptrend. An extension higher would open key resistance and the bull trigger is 1.3207, the Apr 3 high. Single currency weakness has seen EURGBP move 1% lower on Monday to 0.8600.
• For EURUSD, spot had another brief flurry above 1.14 to a 1.1425 high in early trade. However, the greenback stabilisation prompted a solid turnaround for the pair, which now sits closer to 1.1330 as markets have one eye on the ECB meeting this Thursday.
• RBA minutes, UK labour market figures and German ZEW are all scheduled on Tuesday, ahead of Canadian CPI and US Empire State Manufacturing, which highlight the North American session.

MNI OPTIONS: Expiries for Apr15 NY cut 1000ET (Source DTCC)

• EUR/USD: $1.1250(E1.4bln)
• USD/JPY: Y144.00($1.4bln), Y145.00($1.9bln)
• EUR/GBP: Gbp0.8620(E682mln)
• AUD/USD: $0.6140-50(A$1.1bln), $0.6200(A$1.4bln)
• USD/CAD: C$1.4375($1.5bln)
• USD/CNY: Cny7.3600($607mln)

MNI US STOCKS: Late Equities Roundup: Off Midday Lows, Possible Auto Tariff Deal

• Stocks have rebounded from midday lows, the S&P eminis narrowly outperforming the DJIA and Nasaq indexes in late Monday trade. Currently, the DJIA trades up 420.12 points (1.04%) at 40632.29, S&P E-Minis up 68.5 points (1.27%) at 5459.75, the Nasdaq up 163.7 points (1%) at 16887.7.
• Information Technology sector shares still lead gainers in late trade despite ongoing tariff uncertainty after Trump denied that US officials said smartphones, computers, and other consumer electronics were excluded from tariffs over the weekend.
• "There was no tariff exception" announcement Trump said, while officials are "looking at chips, whole electronics supply chain; chips to be assessed in national Security tariff probes." Nevertheless, "markets very strong once they got used to tariffs" Trump just posted.
• Stocks appeared to gain support after midday on a couple items: Pres Trump said he was "exploring possible exemptions to his tariffs on imported vehicles and parts" while Fed Gov Waller called for "flexible" monetary policy while also maintaining his view that the inflationary effects of tariffs are likely to be temporary.
• Late session gainers included Palantir Technologies +5.22%, First Solar +5.00%, Western Digital +4.65%, Enphase Energy +4.63%, Dell Technologies +4.25% and Intel +3.72%. Other gainers included Charles River Laboratories +6.25%, Ford Motor +4.02%, Citigroup +3.72% and Aptiv +3.61%.
• Health Care sector shares underperformed in late Monday trade, namely Humana -4.01%, DaVita -3.61% and UnitedHealth Group -2.74%. Other laggers included Southwest Airlines -2.63%, Meta Platforms -1.87% and Broadcom -1.80%.
• Earnings expected Tuesday: PNC Financial Services, Bank of America, Johnson & Johnson, Sandisk Corp, Albertsons Cos, Citigroup, Interactive Brokers, JB Hunt Transport, United Airlines and Omnicom Group.

MNI EQUITY TECHS: E-MINI S&P: (M5) Corrective Cycle

• RES 4: 5906.75 High Mar 6  
• RES 3: 5837.25 High Mar 25 and the reversal trigger       
• RES 2: 5724.13 50-day EMA
• RES 1: 5512.18 20-day EMA                            
• PRICE: 5425.00 @ 1235 ET Apr 14  
• SUP 1: 5098.16 61.8% retracement of the Apr 7 - 10 bounce                     
• SUP 2: 4832.00 Low Apr 7 and the bear trigger
• SUP 3: 4760.88 1.618 proj of the Feb 19 - Mar 13 - 25 price swing
• SUP 4: 4663.75 1.764 proj of the Feb 19 - Mar 13 - 25 price swing  

A short-term reversal in S&P E-Minis last week highlights the start of a corrective cycle. The trend condition has been oversold following recent weakness and the move higher is allowing this set-up to unwind. Initial resistance to watch is 5524.91, the 20-day EMA. Resistance at the 50-day EMA is at 5737.71. On the downside, key support and the bear trigger has been defined at 4832.00, the Apr 7 low.

TUESDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
15/04/2025	0600/0700	***	GB	Labour Market Survey
15/04/2025	0645/0845	***	FR	HICP (f)
15/04/2025	0800/1000	**	EU	ECB Bank Lending Survey
15/04/2025	0900/1100	**	EU	Industrial Production
15/04/2025	0900/1100	***	DE	ZEW Current Expectations Index
15/04/2025	0900/1000	**	GB	Gilt Outright Auction Result
15/04/2025	1215/0815	**	CA	CMHC Housing Starts
15/04/2025	1230/0830	***	CA	CPI
15/04/2025	1230/0830	**	CA	Monthly Survey of Manufacturing
15/04/2025	1230/0830	**	US	Import/Export Price Index
15/04/2025	1230/0830	**	US	Empire State Manufacturing Survey
15/04/2025	1255/0855	**	US	Redbook Retail Sales Index
15/04/2025	1300/0900	*	CA	CREA Existing Home Sales
15/04/2025	1530/1130	**	US	US Treasury Auction Result for 52 Week Bill
15/04/2025	2310/1910		US	Fed Governor Lisa Cook
16/04/2025	2350/0850	*	JP	Machinery orders
16/04/2025	0200/1000	***	CN	Fixed-Asset Investment
16/04/2025	0200/1000	***	CN	Retail Sales
16/04/2025	0200/1000	***	CN	Industrial Output
16/04/2025	0200/1000	***	CN	GDP
16/04/2025	0200/1000	**	CN	Surveyed Unemployment Rate M/M