MNI ASIA OPEN: Empire Manufacturing Weakest Since Sep 2021
EXECUTIVE SUMMARY
- MNI UK: US VP Vance Talks Up Possible Trade Deal
- MNI TARIFFS: EU Expects US Tariffs To Remain As Talks Make Little Progress-BBG
- MNI US: Dimon Says Trump Administration Should Re-Engage With China - FT Interview
- MNI US DATA: Soft Import Inflation But Some Slightly More Positive Core PCE Tracking
- MNI US DATA: Empire State Manufacturing Outlook Weakest Since Sep 2001
NEWS
MNI US: Dimon Says Trump Administration Should Re-Engage With China - FT Interview
Speaking in a wide-ranging interview with The Financial Times, JPMorgan Chase CEO Jamie Dimon has urged the Trump administration to re-engage with China. Dimon’s comments may carry additional weight as President Donald Trump acknowledged that Dimon's remarks influenced his decision to rein in his tariff agenda last week. Dimon: “I don't think we have any engagement right now, and so - but that can start tomorrow. So, it doesn't have to wait a year. It could start tomorrow. You start with a phone call.”
MNI UK: US VP Vance Talks Up Possible Trade Deal
In an interview with UnHerd, US Vice President JD Vance talks up the prospect of a trade deal being struck with the UK. Vance says, “We’re certainly working very hard with Keir Starmer’s government” [on a trade deal], adding, “I think there’s a good chance that, yes, we’ll come to a great agreement that’s in the best interest of both countries”. Vance also talks up the US' "cultural affinity" with the UK and President Donald Trump's admiration for the British royal family.
MNI SECURITY: Ukraine, UK, France, And Turkey Hold Meeting On Black Sea Security
Ukrainian President Volodymyr Zelenskyy has confirmed that representatives from Ukraine, the UK, France, and Turkey are holding a meeting on Black Sea security today, per Reuters. Zelenskyy also noted that talks today with US officials on a minerals agreement were "positive", adding that more meetings were expected throughout the week. NATO SecGen Mark Rutte said after a meeting with Zelenskyy: "We will continue to help Ukraine so it can defend today and deter future aggression, ensuring a just and lasting peace".
MNI TARIFFS: EU Expects US Tariffs To Remain As Talks Make Little Progress-BBG
Bloomberg reports that the EU expects US 'reciprocal' tariffs to remain in place as talks between the two sides have made little progress. Christophe Barraud at BBG writes there has been little sign of the US and EU "bridging trade differences, with US officials indicating that most US tariffs on the EU will not be removed."
MNI GERMANY: Bild-Merz Ally Linnemann Passes On Econ Min To Stay CDU Sec-Gen
Bild reports that Carsten Linnemann, Secretary General of the centre-right Christian Democratic Union (CDU) and close ally of chancellor-in-waiting Friedrich Merz, has passed on the opportunity to take on the Economy Ministry portfolio in the incoming 'grand coalition' gov't. Instead, Linnemann will retain his position as organisational leader of the CDU. Linnemann: "We have worked over the past three years to rebuild our CDU. This process is not yet complete. I want to continue it."
MNI RUSSIA: Spy Chief-'Poland & Baltics First To Suffer In Event Of NATO Aggression'
State-run TASS reports comments from Sergey Naryshkin, Director of the Foreign Intelligence Service. Says "Russia and Belarus see NATO increasing military activity near their borders, [and] European countries are increasing the level of escalation around Ukraine." Says that Russia will act 'preemptively' given the escalation, adding "Poland and the Baltics must understand that they will be the first to suffer in the event of NATO aggression against the Union State [Russia and Belarus]". Poland, Finland and the Baltic States (Estonia, Latvia, Lithuania) have all recently announced their withdrawal from the Ottawa Convention, which bans the use of anti-personnel landmines, highlighting the severity with which each capital views the threat of a conventional land invasion from the east.
MNI INDIA: Trade Official-India To Go For Path Of Trade Liberalisation w/US
Reuters reports comments from an Indian trade official stating that "India has decided to go for a path of trade liberalisation with the US." Adds that a "deal with the US [will] open up opportunities for India, [and] grow two-way trade". Claims that there has been "very good progress" on trade talks with the US that offer "more opportunities for India than concerns." Says the liberalisation will focus on both tariff and non-tariff barriers. Commerce Secretary Shri Sunil Barthwa says that India "hopes to negotiated a good bilateral trade agreement with the US."
BBG: China Orders Boeing Jet Delivery -- China has ordered its airlines not to take any further deliveries of Boeing Co. jets as part of the tit-for-tat trade war that’s seen US President Donald Trump levy tariffs of as high as 145% on Chinese goods, according to people familiar with the matter. Beijing has also asked that Chinese carriers halt any purchases of aircraft-related equipment and parts from US companies, the people said, asking not to be identified discussing matters that are private.
MNI US TSYS: Sentiment Cools Ahead Wednesday Data, Tariff Headline Risk
- Treasuries look to finish modestly higher for the most part Tuesday, curves flatter (2s10s -3.888 at 48.575) with short end rates underperforming. Cautious early optimism over tariff relief (or delay) for autos buoyed rates and stocks in early trade, evaporated in the second half, markets wary of tariff related headline risk.
- Treasuries inch off lows earlier after Empire Mfg comes out less negative than expected, both import & export price index figures lower than expected, prior import prices down revised while prior export prices are up-revised.
- The Empire manufacturing survey improved by more than expected in April to -8.1 (cons -13.5) after a weak -20.0 in March although forward-looking aspects in particular make for sour reading.
- Overall import prices fell -0.1% M/M (cons 0.0%) in March after a downward revised 0.2% (initial 0.4%) in February. For a better idea of underlying price pressures, imports ex petroleum prices saw a larger miss with 0.0% M/M (cons 0.3) after 0.1% (initial 0.4%).
- Jun'25 10Y futures currently +7.5 at 110-31.5, nearing initial technical resistance at 111-00+/111-20 (20-day EMA / High Apr 9). Cross asset: Bbg US$ index mear highs: +3.84 at 1233.90, stocks weaker w/ SPX eminis -8.75 at 5432.00.
- Focus on midweek data: Retail Sales, Industrial Production, Capacity Utilization, NAHB Housing Market Index while Fed Chair Powell will discuss his outlook at the Economic Club of Chicago (text, Q&A) at 1330ET.
OVERNIGHT DATA
MNI US DATA: Soft Import Inflation But Some Slightly More Positive Core PCE Tracking
Import prices were notably softer than expected in March along with downward revisions to February, although firm details for a specific airfare series could have boosted core PCE estimates a touch. Import inflation should see a boost ahead from recent dollar weakness but the fit is clearly not great.
- Overall import prices fell -0.1% M/M (cons 0.0%) in March after a downward revised 0.2% (initial 0.4%) in February.
- For a better idea of underlying price pressures, imports ex petroleum prices saw a larger miss with 0.0% M/M (cons 0.3) after 0.1% (initial 0.4%).
- It saw ex-petroleum import price inflation ease two tenths to 1.6% Y/Y for its lowest since August via recent highs of 2.3% Y/Y in Oct and Dec.
Within the details, air passenger fares increased 0.6% M/M in NSA terms, between 2024 and 2023 values but higher than most readings in prior years. Morgan Stanley see this as 1% M/M in seasonally adjusted terms vs -4.5% M/M expected and have nudged their core PCE estimate from 0.08% M/M (in line with other analysts) a touch to 0.10% M/M.
MNI US DATA: Empire State Manufacturing Outlook Weakest Since Sep 2001
The Empire manufacturing survey improved by more than expected in April to -8.1 (cons -13.5) after a weak -20.0 in March although forward-looking aspects in particular make for sour reading.
- This is the first regional Fed survey for ‘April’, conducted early in the month through Apr 2-9 which allows it to capture the first impacts of “Liberation Day” tariff announcements on Apr 2 and subsequent large fluctuations in US trade policy since.
- To that end, both prices paid and received indexes increased to their highest levels in more than two years.
- Looking ahead, “Firms turned pessimistic about the outlook [for the first time since 2022], with the future general business conditions index falling to its second lowest reading in the more than twenty-year history of the survey.”
- This forward-looking index of -7.1 has fallen 44 points over the past three months, and to put it in perspective it was only lower in Sep 2001 (survey started Jul 2001). It bottomed at -5.1 in 2009.
- Widespread drivers behind April pessimism: “New orders and shipments are expected to fall slightly in the months ahead. Capital spending plans were flat. Input and selling price increases are expected to pick up, and supply availability is expected to worsen over the next six months.”
MARKETS SNAPSHOT
Key market levels of markets in late NY trade:
DJIA down 163.87 points (-0.4%) at 40361.48
S&P E-Mini Future down 16.25 points (-0.3%) at 5424.25
Nasdaq down 43.7 points (-0.3%) at 16787.38
US 10-Yr yield is down 3.5 bps at 4.3388%
US Jun 10-Yr futures are up 6/32 at 110-30
EURUSD down 0.0065 (-0.57%) at 1.1286
USDJPY up 0.12 (0.08%) at 143.18
WTI Crude Oil (front-month) down $0.01 (-0.02%) at $61.51
Gold is up $16.72 (0.52%) at $3227.88
European bourses closing levels:
EuroStoxx 50 up 59.04 points (1.2%) at 4970.43
FTSE 100 up 114.78 points (1.41%) at 8249.12
German DAX up 298.87 points (1.43%) at 21253.7
French CAC 40 up 62.28 points (0.86%) at 7335.4
US TREASURY FUTURES CLOSE
3M10Y -2.779, 2.394 (L: -1.754 / H: 8.241)
2Y10Y -3.5, 48.973 (L: 48.317 / H: 54.927)
2Y30Y -2.416, 93.571 (L: 90.691 / H: 99.795)
5Y30Y +0.557, 80.094 (L: 76.105 / H: 83.561)
Current futures levels:
Jun 2-Yr futures down 0.875/32 at 103-22.375 (L: 103-20.125 / H: 103-24.625)
Jun 5-Yr futures up 2.5/32 at 108-5 (L: 107-28.5 / H: 108-10.75)
Jun 10-Yr futures up 6/32 at 110-30 (L: 110-15 / H: 111-06)
Jun 30-Yr futures up 4/32 at 114-20 (L: 113-24 / H: 115-01)
Jun Ultra futures up 7/32 at 118-31 (L: 117-24 / H: 119-16)
MNI US 10YR FUTURE TECHS: (M5) Pressuring 20-day EMA
- RES 4: 114-10 High Apr 7 and the bull trigger
- RES 3: 113-00 Round number support
- RES 2: 112-08 High Apr 8
- RES 1: 111-00+/111-20 20-day EMA / High Apr 9
- PRICE: 110-31 @ 1545 ET Apr 15
- SUP 1: 109-08 Low Apr 11
- SUP 2: 108-26+ 76.4% retracement of the Jan 13 - Apr 7 bull cycle
- SUP 3: 108-21 Low Feb 19
- SUP 4: 108-03+ Low Dec 12 ‘24 and a key support
The recovery for Treasury futures extended into a second session Tuesday, with prices pressuring the 20-day EMA on the upside. This levels market initial resistance and a close above could signal that start of a stronger correction higher. For now, the technical trend remains lower: price traded through an important support last week: a trendline at 110-03+, drawn from the Jan 13 low. A clear break of this trendline would strengthen a bearish threat and signal scope for a deeper retracement. This would open 108-26+, a Fibonacci retracement.
SOFR FUTURES CLOSE
Jun 25 -0.010 at 95.925
Sep 25 -0.020 at 96.270
Dec 25 -0.020 at 96.50
Mar 26 -0.010 at 96.645
Red Pack (Jun 26-Mar 27) -0.005 to +0.010
Green Pack (Jun 27-Mar 28) +0.010 to +0.015
Blue Pack (Jun 28-Mar 29) +0.020 to +0.025
Gold Pack (Jun 29-Mar 30) +0.025 to +0.03
SOFR FIXES AND PRIOR SESSION REFERENCE RATES
SOFR Benchmark Settlements:
- 1M +0.00720 to 4.32813 (+0.00627/wk)
- 3M +0.01925 to 4.27979 (+0.02369/wk)
- 6M +0.02896 to 4.14224 (+0.04424/wk)
- 12M +0.01303 to 3.90182 (+0.05052/wk)
US TSYS: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 4.33% (+0.00), volume: $2.561T
- Broad General Collateral Rate (BGCR): 4.33% (+0.01), volume: $1.042T
- Tri-Party General Collateral Rate (TCR): 4.33% (+0.01), volume: $1.002T
- (rate, volume levels reflect prior session)
STIR: FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $99B
- Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $266B
FED Reverse Repo Operation
RRP usage retreats below $100B again to $88.878B this afternoon from $102.838B Monday. 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 23.
MNI PIPELINE: Corporate Bond Update: $20.3B to Price Tuesday, $38.4B for Week
- Date $MM Issuer (Priced *, Launch #)
- 04/15 $8B #Wells Fargo $2.25B 4NC3 +113, $500M 4NC3 SOFR+137, $2.25B 6NC5 +118, $3B 11NC10+128
- 04/15 $6B #Goldman Sachs $2.5B 3NC2 +110, $500M 3NC2 SOFR+129, $3B 6NC5 +125
- 04/15 $3B #MUFG $1B 6NC5 +117, $500M 6NC5 SOFR+128, $1.5B 11NC10 +127
- 04/15 $3.8B #Colombia $1.9B 5Y 7.5%, $1.9B 10Y 8.75%
MNI BONDS: EGBs-GILTS CASH CLOSE: Gilts Strengthen Pre-UK CPI
Gilts handily outperformed Bunds Tuesday.
- Softer-than-expected elements of the UK labour market report saw Gilts get off on the front foot across the curve.
- Gilts rallied into the close, potentially in anticipation of tomorrow's CPI data, unlike Bunds which were unmoved.
- On the day, the UK curve twist steepened with a notable rally at the short end, with Germany's bear steepening.
- Italy and Greece underperformed on the EGB periphery.
- Wednesday's data includes UK CPI - MNI's preview is here. And Thursday brings the ECB decision - preview here.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is up 0.7bps at 1.766%, 5-Yr is up 1.6bps at 2.09%, 10-Yr is up 2.2bps at 2.534%, and 30-Yr is up 3.8bps at 2.915%.
- UK: The 2-Yr yield is down 5.6bps at 3.962%, 5-Yr is down 4.3bps at 4.11%, 10-Yr is down 1.2bps at 4.648%, and 30-Yr is up 4.3bps at 5.427%.
- Italian BTP spread up 1.7bps at 118.2bps / Greek up 2.9bps at 92.4bps
MNI FOREX: EURUSD Slips Back Below 1.13, Antipodeans Outperform
- Overall, the USD index is firmer on Tuesday as global markets trade in a relatively more stable manner compared to the significant swings last week. Amid this dynamic, EURUSD has slipped back below 1.1300 and trades 0.75% lower at 1.1270 as we approach the APAC crossover.
- The single currency move may have intensified following news that the EU and US have made scant progress bridging trade differences this week as officials from the Trump administration indicated that the bulk of the US tariffs imposed on the bloc will not be removed. With a bull cycle firmly still in play, markets will eye initial support at the 1.1144 breakout level. Key support remains unchanged at the 20-day EMA, now intersecting at 1.0972.
- EUR weakness has been even more evident in the crosses, with a notable 0.87% decline for EURGBP. This has been assisted by GBPUSD breaking above 1.3207 to fresh six-month highs, highlighting a resumption of the medium-term uptrend. Sights are on 1.3274 next, the Oct 3 ‘24 high.
- Even more notable across FX, has been the advances for AUD and NZD, which comfortably outperform in the G10 space. The more stable tone for risk this week continues to foster a more constructive backdrop for higher beta currencies. For NZDUSD specifically, the pair has rallied as high as 0.5944, briefly breaching the late November highs in the process. In just 5 sessions, NZDUSD has bounced over 8% from its cycle lows.
- Canada CPI came in lower than expected, which alongside the greenback bid has prompted a solid bounce for USDCAD. Importantly, this comes ahead of tomorrow’s Bank of Canada decision, where analysts remain divided over whether the BOC will opt for a 25bp cut or an unchanged decision.
- Elsewhere tomorrow, China GDP, UK CPI and US retail sales are highlights of a busy economic calendar. Fed Chair Powell is also due to speak on the economic outlook at the Economic Club of Chicago.
WEDNESDAY DATA CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 16/04/2025 | 0600/0700 | *** |  GB | Consumer inflation report |
| 16/04/2025 | 0800/1000 | ** |  EU | EZ Current Account |
| 16/04/2025 | 0800/1000 | ** |  IT | Italy Final HICP |
| 16/04/2025 | 0900/1100 | *** | EU | HICP (f) |
| 16/04/2025 | 1000/1100 | ** | GB | Gilt Outright Auction Result |
| 16/04/2025 | 1100/0700 | ** |  US | MBA Weekly Applications Index |
| 16/04/2025 | 1230/0830 | *** | US | Retail Sales |
| 16/04/2025 | 1315/0915 | *** | US | Industrial Production |
| 16/04/2025 | 1345/0945 | *** |  CA | Bank of Canada Policy Decision |
| 16/04/2025 | 1400/1000 | * | US | Business Inventories |
| 16/04/2025 | 1400/1000 | ** | US | NAHB Home Builder Index |
| 16/04/2025 | 1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 16/04/2025 | 1430/1030 | CA | BOC press conference | |
| 16/04/2025 | 1600/1200 | US | Cleveland Fed's Beth Hammack | |
| 16/04/2025 | 1700/1300 | ** | US | US Treasury Auction Result for 20 Year Bond |
| 16/04/2025 | 1730/1330 | US | Fed Chair Jerome Powell | |
| 16/04/2025 | 2000/1600 | ** | US | TICS |
| 17/04/2025 | 2245/1045 | *** |  NZ | CPI inflation quarterly |
| 17/04/2025 | - | EU | European Central Bank Meeting | |
| 16/04/2025 | 2300/1900 | US | Dallas Fed's Lorie Logan, KC Fed's Jeff Schmid | |
| 17/04/2025 | 0130/1130 | *** |  AU | Labor Force Survey |
