MNI ASIA OPEN: 10Y Yld Breaches 4.25% as Geo-Pol Risk Simmers

EXECUTIVE SUMMARY

• MNI: Fed To Propose Modestly Looser Bank Capital Rules -Bowman
• MNI IRAN: Snr Official Larijani-Iran Won't Relent Until US Pays A Price
• MNI GLOBAL: US Treasury Secretary to Meet China Vice Premier March 15-16
• INTERFAX: Russia, China working together on unlocking potential of Northern Sea Route 
• MNI US DATA: Housing Starts Jump, But Permits Suggest Upward Momentum Is Elusive

US

MNI INTERVIEW: Fed On Sidelines, Awaiting Clarity - Kaplan

The Federal Reserve looks set to keep interest rates on hold for now as officials seek evidence that U.S. inflation is back on a downward trend and try to gauge the effects of war in the Middle East, former Dallas Fed President Rob Kaplan told MNI. "The thought at the Fed is, we'll move, but not until we see evidence of improvement. We don't want to anticipate improvement. What's happened this last two weeks with Iran just kind of reinforces, let's be patient," Kaplan said in an interview.

MNI: Fed To Propose Modestly Looser Bank Capital Rules -Bowman

U.S. bank regulators will propose modestly looser capital requirements in coming weeks, Fed Vice Chair of Supervision Michelle Bowman said Thursday, after intense industry pushback forced the Federal Reserve to significantly scale back its Basel Endgame proposal and G-SIB surcharge reform. 

NEWS

MNI IRAN: Snr Official Larijani-Iran Won't Relent Until US Pays A Price

Chair of the Supreme National Security Council, Ali Larijani, posts on X: "Trump returned to say: "We must win this war quickly." But starting wars is an easy matter, whereas ending them does not happen with a few tweets. We will not relent until you admit your mistake and pay the price." Larijani's bellicose comments mirror those from the new Supreme Leader, Mojtaba Khamenei, who issued in a statement earlier today.

MNI GLOBAL: US Treasury Secretary to Meet China Vice Premier March 15-16

"On March 15-16, Secretary of the Treasury Scott Bessent will meet with Vice Premier He Lifeng of the People’s Republic of China (PRC) in Paris, France." “Thanks to the bonds of mutual respect between President Trump and President Xi, the trade and economic dialogue between the United States and China is moving forward,” said Secretary Bessent. “Under the guidance of President Trump, our team will continue to deliver results that put America’s farmers, workers, and businesses first.” - (US Treasury Press Release)

INTERFAX: Russia, China working together on unlocking potential of Northern Sea Route - Russian Foreign Ministry spokesperson - Russia and China are working on further unlocking the transport-logistical potential of the Northern Sea Route, Russian Foreign Ministry spokesperson Maria Zakharova said.

US TSYS

MNI US TSYS: Short End Rates Canary in Coal Mine For Rate Cut

• Treasuries are extending lows late Thursday, short end SOFR crushed under under heavy selling (SFRU6-SFRU7 -0.110 to -0.175) oil supply disruptions and geopolitical risk in the Middle East underpin inflation concerns (WTI over $96.6/bbl at the moment - still off Monday's appr $120/bbl high).
• Projected rate cut pricing continues to retreat: latest vs. Wednesday lvls (*): Mar'26 at -.1bp, Apr'26 -1.2bp (-2.7bp), Jun'26 at -5.6bp (-9.7bp), Jul'26 at -9.2bp (-16.2bp), Sep'26 at -12.7bp (-23.9bp). *The first 25bp rate cut has been pushed all the way out to July 2027.
• On the other hand, Pres Trump on Truth Social calls for an intermeeting Fed rate cut: @realDonaldTrump "Where is the Federal Reserve Chairman, Jerome “Too Late” Powell, today? He should be dropping Interest Rates, IMMEDIATELY, not waiting for the next meeting! President DONALD J. TRUMP".
• TYM6 currently -18 at 111-13.5 vs. 111-12 low -- continuation lower would signal scope for an extension towards the next key support at 111-06+, the Jan 20 low. Clearance of this level would highlight an important medium-term bearish development.
• Housing activity data was mixed to start the year, with starts jumping in January (as telegraphed by the previous month's rise in permits) but permits pulling back. The starts data were positive but at best, residential construction looks to be a neutral factor in overall economic activity in the early part of 2026. Starts posted an 11-month high 1,487k in January, well above the expected 1,341k and up from 1,387k prior (rev down from 1,404k).
• Look ahead to Friday's Data Calendar: 0830ET: Core PCE & GDP; UofM Sentiment/UofM Inflation and JOLTS at 1000ET

OVERNIGHT DATA

MNI US DATA: Housing Starts Jump, But Permits Suggest Upward Momentum Is Elusive

Housing activity data was mixed to start the year, with starts jumping in January (as telegraphed by the previous month's rise in permits) but permits pulling back. The starts data were positive but at best, residential construction looks to be a neutral factor in overall economic activity in the early part of 2026. Starts posted an 11-month high 1,487k in January, well above the expected 1,341k and up from 1,387k prior (rev down from 1,404k).

MNI US DATA: Initial Jobless Claims Remain Remarkably Steady At Low Level

Initial jobless claims were remarkably steady in the latest week of data, while the prior pickup in continuing claims was largely reversed. Overall the data show no signs of deterioration versus what was already a low-hiring, low-firing labor market. In one of the first pieces of data since the start of the war in the Middle East (and yes, it's still early to expect any labor market impact), initial claims for the Mar 7 week printed 213k, below the 215k expected and a shade lower than the 214k prior (which has been revised up by 1k).

• Continuing claims fell 21k in the week of Feb 28 to 1,850k (almost exactly the 1,849k expected), with a small upward revision to prior of 3k to 1,871k.

MNI CANADA DATA: Trade, Sales Data Point To Soft Early Q1 Activity

The latest January data showed mixed but on balance soft activity at the start of the year. To be sure, more important and up-to-date data going into the BOC's March meeting next week comes Friday with the February Labour Force Survey and manufacturing sales as well as Monday's Feb CPI report, but so far the "hard" data have been fairly weak versus decent survey data to begin 2026.

• Wholesale Sales: Core wholesale sales (ex petroleum, products, other hydrocarbons, oilseed & grains) fell by 1.0% in January, worse than the -0.6% advance estimate and the downwardly revised +1.8% prior (was 2.0%).
• Merchandise Trade: Latest international merchandise trade data showed a C$3.65B deficit in January, well above the C$1.10B expected (and C$1.30B prior).
• Building Permits: There was better news in building permits which rose 4.8% M/M for a second consecutive month in of decent gains (6.1% prior) to the highest level in nominal terms in 3 months, with both residential (1.8%) and non-residential (9.4%) permitting up.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA down 575.05 points (-1.21%) at 46837.87
S&P E-Mini Future down 80.75 points (-1.19%) at 6697.5
Nasdaq down 339.9 points (-1.5%) at 22372.49
US 10-Yr yield is up 2.7 bps at 4.257%
US Jun 10-Yr futures are down 15/32 at 111-16.5
EURUSD down 0.0049 (-0.42%) at 1.1518
USDJPY up 0.41 (0.26%) at 159.36
WTI Crude Oil (front-month) up $8.75 (10.03%) at $96.01
Gold is down $80.19 (-1.55%) at $5096.02

European bourses closing levels:
EuroStoxx 50 down 45.79 points (-0.79%) at 5748.89
FTSE 100 down 48.62 points (-0.47%) at 10305.15
German DAX down 50.38 points (-0.21%) at 23589.65
French CAC 40 down 57.37 points (-0.71%) at 7984.44

US TREASURY FUTURES CLOSE

Curve update:
3M10Y +2.724, 56.322 (L: 50.814 / H: 57.674)
2Y10Y -5.449, 51.83 (L: 49.611 / H: 57.73)
2Y30Y -8.789, 113.383 (L: 111.428 / H: 123.609)
5Y30Y -6.574, 100.661 (L: 99.608 / H: 109.023)
Current futures levels:
Jun 2-Yr futures down 6.625/32 at 103-28 (L: 103-26.375 / H: 104-02.5)
Jun 5-Yr futures down 13.25/32 at 108-15.5 (L: 108-12.5 / H: 108-28.75)
Jun 10-Yr futures down 15.5/32 at 111-16 (L: 111-12 / H: 111-31.5)
Jun 30-Yr futures down 17/32 at 114-8 (L: 114-03 / H: 114-21)
Jun Ultra futures down 12/32 at 117-0 (L: 116-18 / H: 117-10)

MNI US 10YR FUTURE TECHS: (M6) Bear Cycle Extension

• RES 4: 113-13+ Low Feb 27 
• RES 3: 113-07+ High Mar 3
• RES 2: 113-03   High Mar 4  
• RES 1: 112-19+112-24+ 20-day EMA / High Mar 10
• PRICE:‌‌ 111-28+ @ 10:33 GMT Mar 12
• SUP 1: 111-21   Intraday low
• SUP 2: 111-13+ Low Feb 5
• SUP 3: 111-08+ Low Feb 3
• SUP 4: 111-06+ Low Jan 20 and a key support  

A bear cycle in Treasuries remains intact and a fresh short-term cycle low today, reinforces bearish conditions. A continuation lower would signal scope for an extension towards the next key support at 111-06+, the Jan 20 low. Clearance of this level would highlight an important medium-term bearish development. Initial firm resistance is seen at 112-19+, the 20-day EMA. It has been pierced, a clear break of it is required to signal a possible reversal.

SOFR FUTURES CLOSE

Current White pack (Mar 26-Dec 26):
Mar 26 -0.013 at 96.315
Jun 26 -0.045 at 96.380
Sep 26 -0.10 at 96.435
Dec 26 -0.125 at 96.485
Red Pack (Mar 27-Dec 27) -0.15 to -0.115
Green Pack (Mar 28-Dec 28) -0.105 to -0.075
Blue Pack (Mar 29-Dec 29) -0.07 to -0.05
Gold Pack (Mar 30-Dec 30) -0.04 to -0.03

REFERENCE RATES
​​​​​​​
US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 3.64% (+0.00), volume: $3.175T
• Broad General Collateral Rate (BGCR): 3.62% (+0.00), volume: $1.315T
• Tri-Party General Collateral Rate (TCR): 3.62% (+0.01), volume: $1.291T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 3.64% (+0.00), volume: $104B
• Daily Overnight Bank Funding Rate: 3.64% (+0.01), volume: $196B

FED Reverse Repo Operation

RRP usage retreats to $0.137B with 4 counterparties this afternoon vs. $0.552B Wednesday. Compares to last year's highest excess liquidity measure: $460.731B on June 30.

MNI PIPELINE: Corporate Bond Update

• Date $MM Issuer (Priced *, Launch #)
• 03/12 $2.55B #Maple Parent Holdings $550M 3Y +100, $600M 5Y +120, $700M 10Y +145, $700M 30Y +175
• 03/12 $2.5B #Airbnb $850M 3Y +65, $850M 5Y +82, $800M 10Y +102
• 03/12 $1.6B #Oncor Electric Delivery $750M 5Y +68, $850M 30Y +105
• 03/12 $1B Esab Corp 5NC2 5.75%a
• 03/12 $750M *CAF 3.5Y SOFR+53
• 03/12 $Benchmark Grand River Funding 10Y +205, 30Y +240
• $43B Priced Wednesday, $112.45B/wk

MNI BONDS: EGBs-GILTS CASH CLOSE: Gilts Slump As Geopolitics Simmer

The European government bond rout continued Thursday as hope of a near-term resolution to the Iran-US conflict faded.

• The session saw some bear steepening early with continued adherence to geopolitical headlines and concomitant moves in energy prices.
• Intraday yield highs were seen in early afternoon after the new Iranian Supreme Leader said that the closure of the Strait of Hormuz should continue, pushing oil prices higher.
• There was a bit of relief toward the cash close, after the Iranian deputy foreign minister said Iran allowed some ships to cross the Strait and that the country was not laying mines.
• But the damage was done, particularly for Gilts which saw rises of 8+bp across the curve, easily underperforming Bunds.
• 10Y German yields saw their highest close since October 2023, with Gilts threatening the September 2025 high close (4.80%).
• Periphery/semi-core EGB spreads widened in line with the risk-off move.
• Friday's European data highlight is monthly UK activity data for January, along with some final February Eurozone GDP prints and January industrial production.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 2.6bps at 2.404%, 5-Yr is up 0.7bps at 2.6%, 10-Yr is up 1.4bps at 2.946%, and 30-Yr is up 2bps at 3.514%.
• UK: The 2-Yr yield is up 8.5bps at 4.09%, 5-Yr is up 8.8bps at 4.296%, 10-Yr is up 8.5bps at 4.771%, and 30-Yr is up 9.4bps at 5.448%.
• Italian BTP spread up 4.4bps at 78bps / French up 3.8bps at 67.4bps

MNI FOREX: USD Tracking Oil Prices Higher, Risk-Off Weighs on Higher Beta FX

• WTI crude futures are trading with 8.5% gains on Thursday as the rhetoric surrounding the Middle East conflict appears to have intensified. Iran’s new supreme leader stated that the Strait of Hormuz should remain closed, accelerating the risk off moves throughout the session. These dynamics have kept the dollar on the front foot, with the USD index trading to fresh recovery highs as we approach the APAC crossover.
• Waning sentiment across financial markets has most notably weighed on higher beta currencies, with AUD, NZD and SEK the worst performers in G10, and significant pressure being exerted on the EM FX basket.
• For AUDUSD, it’s a notable turnaround after the pair traded up to fresh cycle highs of 0.7187 yesterday. The recent enthusiasm/resilience has been centred around hawkish RBA expectations, with ANZ joining Australia’s other top banks in calling for a rate hike next week. The reversal takes the pair back below the 2023 high breakout point, which was located at 0.7158 to current spot levels of 0.7085. Key support to monitor remains much lower around the 50-day EMA, at 0.6958.
• In the majors, both the EUR and JPY have been pressured alongside the rising energy costs, and the EURUSD grind lower stalled just shy of the recent 1.1507 lows. 1.1500-1.1470 remains a key pivot support, and the key obstacle to further downside.
• For USDJPY, spot remains around 15pips shy of the 159.45 bull trigger, the January 14 high. Market chatter remains centred around whether the BOJ/MOF could step in to support the yen, particularly notable given the pair is now trading at levels where rate checks were conducted earlier this year. However, the fundamentals driving the move, and the relatively orderly nature of the rally in recent sessions may dissuade the authorities from imminent action.
• Elsewhere, NOKSEK briefly extended gains to more than 1% on the session, printing above 0.9650. The latest upside has been driven by the SEK leg with risk, while NOK continues to display a little more resilience thanks to familiar terms of trade dynamics.
• In emerging markets, the likes of ZAR (-1.7%), HUF (-1.1%), CLP (-2.4%) and MXN (-0.8%) are bearing the brunt of the latest slippage for risk.
• Friday’s calendar is headlined by US PCE and Canadian Employment data.

FRIDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
13/03/2026	0700/0700	**	GB	UK Trade Balance
13/03/2026	0700/0700	***	GB	UK Short-Term Activity Indicators
13/03/2026	0700/0800	**	SE	Unemployment
13/03/2026	0700/0800	*	DE	Wholesale Prices
13/03/2026	0700/0700	***	GB	UK Short-Term Activity Indicators
13/03/2026	0700/0700	***	GB	UK Short-Term Activity Indicators
13/03/2026	0700/0700	***	GB	UK Short-Term Activity Indicators
13/03/2026	0745/0845	***	FR	HICP (f)
13/03/2026	0800/0900	***	ES	HICP (f)
13/03/2026	0900/1000	*	IT	Industrial Production
13/03/2026	0930/0930		GB	BOE/Ipsos Inflation Attitudes Survey
13/03/2026	1000/1100	**	EU	EZ Industrial Production
13/03/2026	1230/0830	***	CA	Labour Force Survey
13/03/2026	1230/0830	**	CA	Monthly Survey of Manufacturing
13/03/2026	1230/0830	***	CA	Labour Force Survey
13/03/2026	1230/0830	*	CA	Intl Investment Position
13/03/2026	1230/0830	***	US	GDP / PCE Quarterly
13/03/2026	1230/0830	***	US	GDP / PCE Quarterly
13/03/2026	1230/0830	***	US	Personal Income and Consumption
13/03/2026	1230/0830	**	US	Durable Goods New Orders
13/03/2026	1230/0830	**	US	Durable Goods New Orders
13/03/2026	1400/1000	***	US	JOLTS
13/03/2026	1400/1000	***	US	UMich Surveys of Consumers
13/03/2026	1400/1000	***	US	JOLTS
13/03/2026	1400/1000	***	US	UMich Surveys of Consumers
13/03/2026	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly
13/03/2026	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly
13/03/2026	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly