MNI ASIA MARKETS ANALYSIS: Trump Wants Preemptive Cuts
HIGHLIGHTS
- Treasuries look to finish near session lows, curves twist steeper as tariff-tied risk sentiment and concerns over Fed independence hampers sentiment.
- Pres Trump berates Fed Chairman Powell and reiterated a call for "preemptive cuts".
- Market depth limited as Europe remained closed for Easter Monday.
MNI US TSYS: Tariff Tied Headline Risk & Fed Independence Meddling
- Treasuries look to finish mostly lower Monday, curves twist steeper as the short end outperforms a sell-off in the long end, risk sentiment hampered as stocks hold at or near session lows.
- Headline risk continues to rattle markets, latest focus partially tied to headlines that the WH is in the process of replacing Sec of Defense Hegseth following reports of another Signal Chat leak made the rounds. Politico reported GOP Rep Bacon said "Hegseth should Go". Conversely, WH Press Sec Leavitt just said the NPR report is false.
- Global trade remains the greater concerns, markets await something concrete in tariff negotiations vs. hopes and promises that talks with dozens of countries is going well, while Pres Trump berates Fed Chairman Powell and reiterating a call for "preemptive cuts".
- Curves near late highs: 2s10s currently +13.246 65.492 vs. 66.377 high, 5s30s +8.604 at 94.411. Jun'25 10Y futures -13.5 at 110-24 vs. late overnight low of 110-22. Technical at 110-15/109-08 (Low Apr 15 / 11 and the bear trigger). In turn, projected rate hike pricing gain momentum vs. morning levels (*) as follows: May'25 at -4bp (-3.4bp), Jun'25 at -19.8bp (-19bp), Jul'25 at -43.6bp (-40.1bp), Sep'25 -63.4bp (-59.9bp).
- Stocks reacting negatively, extending lows with SPX eminis slipping to 5127.25 low, Consume Discretionary and IT sectors underperforming. US$ broadly weaker, BBG index -8.47 at 1216.21.
- Tuesday Data Calendar: several Fed speakers, Richmond Fed data and Tsy $69B 2Y Note Sale.
REFERENCE RATES (PRIOR SESSION)
US TSYS: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 4.32% (+0.01), volume: $2.505T
- Broad General Collateral Rate (BGCR): 4.31% (+0.01), volume: $1.047T
- Tri-Party General Collateral Rate (TCR): 4.31% (+0.01), volume: $1.016T
- (rate, volume levels reflect prior session)
STIR: FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $94B
- Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $114B
FED Reverse Repo Operation
RRP usage rebounds to $114.114B this after noon from $58.600B last Thursday. Usage had fallen to $54.772B last Wednesday, April 16 -- lowest level since April 2021. Usage had surged to the highest level since December 31, 2024 last Monday, March 31: $399.167B. The number of counterparties at 38.
US SOFR/TREASURY OPTION SUMMARY
Mixed Treasury option flow gradually picking up ahead the NY open, light overnight trade with Europe closed for Easter Monday. Underlying futures extending lows, curves twisting steeper with short end resisting sell-off, 2s10s +9.053 at 61.299. Despite this morning's sell-off, projected rate hike pricing gain slightly vs. Thursday levels (*) as follows: May'25 at -3.4bp (-2.7bp), Jun'25 at -19.0bp (-17.6bp), Jul'25 at -40.1bp (-38.6bp), Sep'25 -59.9bp (-57.4bp).
SOFR Options:
-2,500 3QK5 96.00 puts, 3.5 ref 96.44
-10,000 SFRN5 95.50/95.75 put spds, 0.75 ref 96.31
-10,000 SFRN5 95.81/95.93 put spds 2.25 vs. 96.34/0.05%
+3,000 SFRH6 98.00 calls, 13.0 vs. 96.825/0.18%
+5,000 SFRU5 96.50/97.50call spds, 15.25 ref 96.34
+2,500 0QK5 97.00/97.25/97.50 call flys, 3.75 ref 96.925
+5,000 SFRM5 95.62/95.68 put spds, 0.5 ref 95.94
-2,500 2QM5 96.62/97.12 call spds, 18.25 vs. 96.715/0.34%
-10,000 SFRN5 95.50/95.75 put spds, 0.75 ref 96.305
-4,000 SFRH6 97.18/98.25 call spds vs. 0QH6 97.25/98.25 call spd spd, 0.25 net midcurve over
+13,000 SFRM5 96.25 calls, 6.0 vs. 95.925/0.22%
Treasury Options:
10,000 TYK5 109 puts, 1 ref 110-26
11,179 TYM5 108/111 2x1 put spds, 32 ref 110-25.5
4,000 TYK5 109.5/111 put spds vs. 111/111.5 call spds ref 110-30
2,000 TYK5 110.75/111.5 strangles 30 ref 110-29.5
1,500 FVM5 108.5/109 call spds, 14.5 ref 108-16.5
over 7,400 TYM5 114 calls, 14 last
over 6,000 TYK5 110.75 puts 18 last
over 8,700 TYK5 110 puts, partly tied to 109/110 2x1 put spds
2,500 wk2 TY 112 calls ref 111-06
EGBS
European markets were closed for Easter Monday holiday
FOREX
| Spot | Change (Price) | Change (%) | ||
| One-day | One-week | |||
| EURUSD | 1.1524 | 0.0131 | 1.15% | 1.52% |
| GBPUSD | 1.3382 | 0.0086 | 0.65% | 1.46% |
| USDJPY | 140.63 | -1.55 | -1.09% | -1.70% |
| AUDUSD | 0.6417 | 0.0040 | 0.63% | 1.41% |
| NZDUSD | 0.6006 | 0.0069 | 1.16% | 2.19% |
| USDCAD | 1.3835 | -0.0012 | -0.09% | -0.28% |
| USDCNH | 7.2925 | -0.0136 | -0.19% | -0.26% |
MNI US STOCKS: Late Equities Roundup: Hugging Lows
- Stocks are holding near deep session lows in late Monday trade, Consumer Discretionary and Information Technology sectors continue to underperform with lack of clarity and communication over trade negotiations widely sited.
- Currently, the DJIA trades down 1258.06 points (-3.21%) at 37884.8, S&P E-Minis down 180.5 points (-3.4%) at 5132 (April 10 lows, still off April 7 low of 4832.00, The Nasdaq down 596.8 points (-3.7%) at 15689.37.
- Information Technology and Consumer Discretionary sectors continued to underperform, semiconductor makers primarily weighing on the IT sector: Super Micro Computer -7.60%, Arista Networks -6.04%, NVIDIA -5.76%, Palo Alto Networks -5.47%, Oracle -5.41% and Broadcom -4.91%.
- The Consumer Staples sector weighed down by Tesla -6.91%, DoorDash -5.87%,Chipotle Mexican Grill -4.48%, Carnival -4.22%, Ross Stores -4.01% and TJX Cos -3.93%.
- A mix of Financials, interactive media and pharmaceuticals outperformed in late trade: Discover Financial Services +3.34%, Fidelity National Information +3.00%, Netflix +1.40%, Moderna +1.34% and Dollar General +1.15%.
- Equity earnings resume after the close: Hexcel Corp, Medpace Holdings Inc, W R Berkley Corp, AGNC Investment Corp and Western Alliance Bancorp reporting.
TUESDAY DATA CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 22/04/2025 | 0600/0800 | ** |  SE | Unemployment |
| 22/04/2025 | 1230/0830 | * |  CA | Industrial Product and Raw Material Price Index |
| 22/04/2025 | 1230/0830 | ** |  US | Philadelphia Fed Nonmanufacturing Index |
| 22/04/2025 | 1255/0855 | ** | US | Redbook Retail Sales Index |
| 22/04/2025 | 1300/0900 | US | Fed Vice Chair Philip Jefferson | |
| 22/04/2025 | 1330/0930 | US | Philly Fed's Pat Harker | |
| 22/04/2025 | 1400/1000 | ** | US | Richmond Fed Survey |
| 22/04/2025 | 1400/1600 | ** |  EU | Consumer Confidence Indicator (p) |
| 22/04/2025 | 1700/1900 | EU | ECB's De Guindos at MIT/ICADE Finance Club | |
| 22/04/2025 | 1700/1300 | * | US | US Treasury Auction Result for 2 Year Note |
| 22/04/2025 | 1740/1340 | US | Minneapolis Fed's Neel Kashkari | |
| 22/04/2025 | 1830/1430 | US | Richmond Fed's Tom Barkin | |
| 22/04/2025 | 2200/1800 | US | Fed Governor Adriana Kugler | |
| 23/04/2025 | 2300/0900 | *** |  AU | Judo Bank Flash Australia PMI |
| 23/04/2025 | 2301/0001 | * |  GB | Brightmine pay deals for whole economy |
| 23/04/2025 | 0030/0930 | ** |  JP | Jibun Bank Flash Japan PMI |
