EXECUTIVE SUMMARY
NEWS
FED (MNI INTERVIEW): Federal Reserve officials will likely cut interest rates once or twice this year if inflation eases further or growth begins to flag, but the easing cycle is nearly finished barring a deeper downturn, former New York Fed economist Gianluca Benigno told MNI. “They are very cautious in terms of moving forward because they see sticky inflation, they don’t see the progress they expected especially on the service side, and now there’s a risk that goods inflation might contribute rather than subtract from inflation,” he said in an interview.
MNI US CPI Preview: Analyst unrounded estimates see core CPI inflation easing to a still solid 0.28% M/M in February after a far stronger than expected 0.45% M/M in January. This report won't influence March's FOMC decision, but with only one more report before the May decision, the main risk given current market pricing is that the data could largely cement a "hold" until at least June.
US/CANADA (MNI): Farm industry leaders tell MNI they are pushing Canada's government to pay compensation for losses in a prolonged U.S. trade war and spend on expanded port and rail lines moving goods to new overseas markets, pressuring officials who are already missing deficit targets.
UKRAINE/RUSSIA (BBG): Ukraine Accepts US-Brokered Ceasefire Plan in Exchange for Aid
Ukraine accepted a US proposal for a 30-day truce with Russia as part of a deal with the Trump administration to lift a freeze on military aid and intelligence for Kyiv. The agreement laid out in a joint statement follows eight hours of talks in Saudi Arabia on Tuesday that raised the possibility of a pause of hostilities in Russia’s three-year war that’s ravaged Ukraine. The US will now take the proposal to Russia’s President Vladimir Putin to seek his agreement. “Hopefully President Putin will agree to that also, and we can get this show on the road,” President Donald Trump told reporters at the White House.
US/CANADA (BBG): Trump Reconsiders Tariff Hike After Ontario Halts Energy Charge
President Donald Trump said he was reevaluating plans to double steel and aluminum tariffs on Canada to 50% after Ontario announced it would suspend a 25% surcharge on electricity sent to the US. "I’m looking at that, but probably so,” Trump told reporters Tuesday when asked if the deescalation would lead him to back down on his tariff threat. “I’ll let you know about it.” Trump’s reconsideration looked to calm a brief but dramatic volley in the widening trade war between the US and Canada that has rocked markets and hung a cloud of uncertainty across major North American industries.
US/CANADA (MNI POLITICAL RISK): Canadian Prime Minister-designate Mark Carney has pledged to keep Canadian trade countermeasures in place, after US President Donald Trump's trade war escalation today. Carney said on X: "President Trump’s latest tariffs are an attack on Canadian workers, families, and businesses. My government will ensure our response has maximum impact in the US and minimal impact here in Canada, while supporting the workers impacted. My government will keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade."
US (MNI POLITICAL RISK): White House Press Secretary Karoline Leavitt has told reporters that she "echoes" President Donald Trump's sentiment that the US economy is in a "transition period" from an "economic nightmare" under the Biden administration to a "golden age" under Trump. When asked if the White House can "reassure Americans that there's not going to be a recession", Leavitt says when it comes to the stock market and economic numbers - likely referring to jobs data this week and CPI tomorrow - are a "snapshot of a moment in time". Leavitt: "As President Trump has said... We are in a period of economic transition. We are in a period of transition from the mess that was created [by Biden]. Joe Biden left this country in an economic disaster."
PORTUGAL (BBG): Portugal’s Government Collapses After Losing Parliamentary Vote
Portugal’s parliament toppled Prime Minister Luis Montenegro’s center-right minority government in a confidence vote Tuesday, likely leading the country to its third early election in just over three years. The premier requested the confidence vote last week, saying he wanted to clarify whether his minority government had “all the conditions” to carry out its program after struggling to put an end to speculation about potential conflicts of interest related to a company owned by his family.
EU (MNI BRIEF): EU finance ministers pushed back against Germany's call for a review of the bloc's fiscal rules to allow a long-term exemption for defence spending, stressing the continuing importance of fiscal sustainability and market credibility, Polish Finance Minister and the current EU chair of the ministers' meetings Andrzej Domanski said. The ECOFIN ministers had discussed a possible ten-year escape clause for defence today as well as the Commission's four-year approach, which exempts defence spending only for a period until it has reached a new, higher structural level of spending.
SPAIN (MNI BRIEF): The Bank of Spain has revised up its 2025 domestic inflation projection for the country to 2.5% (up from 2.1%) due to higher energy prices and has kept unchanged its projection for 2026 and 2027 with prices at 1.7% and 2.4%, respectively. The national bank has also revised growth up to 2.7% (0.2pp higher) for this year while also keeping it unchanged for the next two years at 1.9% and 1.7%. Internal demand boosted growth more than expected in Q4 2024 and Q1, but it should moderate in the coming quarters, the projections show.
OVERNIGHT DATA
MNI: US BLS: JOLTS OPENINGS 7.740M IN JAN; DEC REVISED TO 7.508M
US DATA: JOLTS Report Shows Labor Moderation Stalling After Large Rebalancing
The January JOLTS report saw higher than expected job openings whilst annual revisions have left a slightly weaker than first thought trend early in 2H24 before some recent firming. The quits rate increase was exaggerated by rounding but is nevertheless a rare second month with an unrounded increase although it’s too soon to materially show impact from DOGE pressure.
US NFIB FEB SMALL BUSINESS INDEX 100.7
US DATA: Small Business Optimism Further Off Highs, Hawkish Price Details
MNI: US REDBOOK: MAR STORE SALES +5.7% V YR AGO MO
US REDBOOK: STORE SALES +5.7% WK ENDED MAR 08 V YR AGO WK
US DATA: Redbook Retail Sales Remain Solid Into March
March month-to-date Johnson Redbook Retail Sales were up 5.7% Y/Y as of the March 8 week.
US TSYS: Late Reversal Lower Ahead Of CPI
Treasuries rallied early before completing a reversal lower late Tuesday, with geopolitical and trade war headlines providing the impetus.
The Jun 25 T-Note future is down 13/32 at 110-295, having traded in a range of 110-255 to 111-250.
Cash Tsy Yields
US 10YR FUTURE TECHS: (M5) Trend Structure Still Bullish
The trend structure in Treasury futures is bullish. This is reinforced by moving average studies that remain in a bull-mode condition, highlighting an uptrend. The contract has recently pierced resistance at 111-22+, the Dec 3 ‘24 high. A clear breach of this level would strengthen a bullish theme and open 112-02 and 112-13, Fibonacci projection points. Firm support is at 110-00, the Feb 7 high.
US TSYS/OVERNIGHT REPO: SOFR Continued To Soften Monday
Secured rates softened for a second consecutive session Monday, with SOFR dipping by 1bp again to 4.33%, matching the lowest levels of the month.
REPO REFERENCE RATES (rate, change from prev. day, volume):
* Secured Overnight Financing Rate (SOFR): 4.33%, -0.01%, $2505B
* Broad General Collateral Rate (BGCR): 4.32%, -0.01%, $960B
* Tri-Party General Collateral Rate (TGCR): 4.32%, -0.01%, $931B
New York Fed EFFR for prior session (rate, chg from prev day):
* Daily Effective Fed Funds Rate: 4.33%, no change, volume: $105B
* Daily Overnight Bank Funding Rate: 4.33%, no change, volume: $292B
US TSYS/OVERNIGHT REPO: Overnight Reverse Repo Takeup Picks Back Up
Takeup of the Fed's overnight reverse repo facility continued to fluctuate Tuesday, rising $8.3B to $137.3B (after falling $7.3B prior and rising $7.0B two sessions ago).
EGBs-GILTS CASH CLOSE: Twist Steepening As Bunds Underperform
Long-end yields backed up Tuesday across European curves, with periphery EGBs and Gilts outperforming Bunds.
Closing Yields / 10-Yr EGB Spreads To Germany
FX: CAD Surges Back to Positive as Ontario Rolls Back Electricity Surcharge
USD/CAD corrects lower on the Ford headlines - Trump was particularly critical of the electricity surcharges levied against US consumers on Truth Social earlier today, which may be playing out in Ontario's decision to suspend the measures. Some positivity also clearly being read into Ford's comment that a "renewed" USMCA deal will be discussed ahead of the April 2nd reciprocal tariff deadline.
Date | GMT/Local | Impact | Country | Event |
12/03/2025 | 0001/0001 | * | ![]() | RICS House Prices |
12/03/2025 | 0730/0730 | ![]() | DMO propose calendar for first 3 weeks of FY25/26 | |
12/03/2025 | 0845/0945 | ![]() | Lagarde at "ECB and Its Watchers" conference Frankfurt | |
12/03/2025 | 1000/1000 | ** | ![]() | Gilt Outright Auction Result |
12/03/2025 | 1100/0700 | ** | ![]() | MBA Weekly Applications Index |
12/03/2025 | 1100/1200 | ![]() | ECB Wage Tracker | |
12/03/2025 | - | *** | ![]() | New Loans |
12/03/2025 | - | *** | ![]() | Money Supply |
12/03/2025 | - | *** | ![]() | Social Financing |
12/03/2025 | 1230/0830 | *** | ![]() | CPI |
12/03/2025 | 1345/0945 | *** | ![]() | Bank of Canada Policy Decision |
12/03/2025 | 1430/1030 | ** | ![]() | DOE Weekly Crude Oil Stocks |
12/03/2025 | 1515/1615 | ![]() | Lane at "ECB and Its Watchers" conference Frankfurt | |
12/03/2025 | 1700/1300 | ** | ![]() | US Note 10 Year Treasury Auction Result |
12/03/2025 | 1800/1400 | ** | ![]() | Treasury Budget |
13/03/2025 | 0700/0800 | *** | ![]() | Inflation Report |
13/03/2025 | 0950/1050 | ![]() | de Guindos in fireside chat at EIOPA Sustainable Finance Conference | |
13/03/2025 | 1000/1100 | ** | ![]() | Industrial Production |
13/03/2025 | 1230/0830 | * | ![]() | Building Permits |
13/03/2025 | 1230/0830 | * | ![]() | Household debt-to-income |
13/03/2025 | 1230/0830 | *** | ![]() | Jobless Claims |
13/03/2025 | 1230/0830 | ** | ![]() | WASDE Weekly Import/Export |
13/03/2025 | 1230/0830 | *** | ![]() | PPI |
13/03/2025 | 1400/1000 | * | ![]() | Services Revenues |
13/03/2025 | 1430/1030 | ** | ![]() | Natural Gas Stocks |
13/03/2025 | 1530/1130 | ** | ![]() | US Bill 04 Week Treasury Auction Result |
13/03/2025 | 1530/1130 | * | ![]() | US Bill 08 Week Treasury Auction Result |
13/03/2025 | 1700/1300 | *** | ![]() | US Treasury Auction Result for 30 Year Bond |