MNI ASIA OPEN: Focus Turns to Domestic Data, Warsh Nomination
EXECUTIVE SUMMARY
- MNI IRAN: Reports Suggest Iran Government Preparing for Prolonged War
- MNI Spain Has Agreed To Cooperate With US Military - White House Press Sec
- MNI ISRAEL: Local Media Reports IDF Says Two Weeks More Bombing Of Iran
- BLOOMBERG: Bessent Says Trump’s Tariff Hike to 15% Likely Coming This Week
- MNI US DATA: Final PMIs Point To Cool Growth In Q1 So Far
- MNI US DATA: Broad-Based Jump In ISM Services Comes With Cooling Prices
- MNI US DATA: ADP Payrolls Beat In February, But Underlying Details Don't Convince
- MNI US Payrolls Preview: Softer, With Many Moving Parts
US
MNI FED: Warsh Nomination Heads To The Senate
The White House has officially nominated former Fed Governor Kevin Warsh as the next Fed chair (four-year term) for when Jerome Powell’s Chair role ends in May, along with a fourteen-year Governor role. The nomination heads to the Senate but progress isn’t clear cut.
MNI US: Trump Attention Turns To Texas Primary - Trump on upcoming endorsement for Texas GOP Senate primary:
@realDonaldTrump "The Republican Primary Race for the United States Senate in the Great State of Texas, a State I LOVE and won 3 times in Record Numbers (the HIGHEST vote ever recorded, by far!!!), cannot, for the good of the Party, and our Country, itself, be allowed to go on any longer. IT MUST STOP NOW! We have an easy to beat, Radical Left Opponent, and we have to TOTALLY FOCUS on putting him away, quickly and decisively! Both John and Ken ran great races, but not good enough. Now, this one, must be PERFECT! My Endorsements within the Republican Party have been virtually insurmountable! It is such an honor to realize and say that almost everyone I Endorse WINS, and wins by a lot, especially in Texas! I will be making my Endorsement soon, and will be asking the candidate that I don’t Endorse to immediately DROP OUT OF THE RACE! Is that fair? We must win in November!!! Thank you for your attention to this matter. President DONALD J. TRUMP"
NEWS
MNI IRAN: Reports Suggest Iran Government Preparing for Prolonged War
The government in Iran is reported to have begun implementing an “emergency plan” to run the country under a prolonged war, semi-official Fars news reports. The plan is designed to ensure the supply of essential goods, protect people’s livelihoods, and secure production inputs under an extended war, with information cited from the government’s economic team.
MNI Spain Has Agreed To Cooperate With US Military - White House Press Sec
White House Press Secretary Leavitt says in a press briefing that Spain has agreed to cooperate with the US military, after President Trump yesterday threatened to cut off all trade with Spain in retaliation for a lack of access to its military bases. As noted yesterday, Spain operated a goods trade deficit with the US worth 0.5% of Spanish GDP in 2025, dominated by imports of US energy, with a services surplus broadly offsetting this.
BLOOMBERG: CHINA TO SEND SPECIAL ENVOY ON MIDDLE EAST ISSUE FOR MEDIATION
BLOOMBERG: CHINA'S WANG: SAFETY OF SHIPPING ROUTES MUST BE SAFEGUARDED
BLOOMBERG: IRAN BEGINS SHIFT TOWARD GOVERNING FOR PROLONGED WAR: FARS
BLOOMBERG: Bessent Says Trump’s Tariff Hike to 15% Likely Coming This Week - Treasury Secretary Scott Bessent said that President Donald Trump’s plan to increase a 10% universal tariff up to 15% will likely be done this week. “That’s likely sometime this week,” Bessent said on CNBC in response to a question about when the increase to 15% would be implemented.
MNI IRAN: Ministry Source Denies Iranian Intelligence Reached Out to CIA
"*IRAN DENIES INTELLIGENCE MINISTRY REACHED OUT TO CIA FOR TALKS" - bbg That's in response to earlier NYT piece that cited sources in reporting Iranian intelligence had reached out to the CIA "to discuss terms for an end to the conflict".
MNI US-EU: BBG-EU Expects Exemption From US 15% Tariff Boost
Bloomberg News reports that the EU expects to be exempted from the US plan to boost its universal tariff from 10% to 15% in the immediate future. The report claims that "The EU received assurances that the US will keep a 10% universal tariff rate in effect for the bloc’s exports, according to people familiar with the matter, who spoke on the condition of anonymity."
MNI SECURITY: Hegseth/Caine Claim US Is Close To Total Control Of Iranian Airspace
Chairman of the Joint Chiefs of Staff General Dan Caine and US Defense Secretary Pete Hegseth are speaking at a press conference at the Pentagon. Comments are consistent with what appears to be a considered public pivot from the Trump administration to narrow the scope of the campaign to focus entirely on military goals, rather than regime change or other potential political outcomes. Hegseth says, “America is winning.” He says the US has “only just begun” its campaign against Iranian military targets. He says the Iranian air force “is no more” and their navy “rests at the bottom of the Gulf.”
MNI ISRAEL: Local Media Reports IDF Says Two Weeks More Bombing Of Iran
Israel's Channel 13 reports that "Senior IDF officers say today (Wednesday) that we have two more weeks of bombings across Iran ahead of us, with the plan being to attack thousands of targets with heavy bombers from the United States military - including all targets of the regime, the Revolutionary Guards, Basij, satellites, drones and tanks." Al Jazeera, reports Israel's Channel 12 stating the bombardment will last "at least" two weeks, rather than a set fortnight.
US TSYS
MNI US TSYS: Midweek Markets Calmer While Middle East Risks Remain
- Treasuries look to finish weaker Wednesday, 2s-10s extending lows after the bell as Pres Trump discusses the conflict with Iran from the WH, saying the US "will continue forward" and "doing well on the war front."
- TYM6 currently -8 at 112-24.5 vs. 112-23.5 low, 10Y yield +.0249 at 4.0843%. Initial technical support at 112-16+ (Low Mar 03) followed by 112-16 (50-day EMA).
- Markets continued to weigh the magnitude of risks tied to Saturday's US/Israel attack on Iran - while West Texas and Brent Crude prices traded near flat in late trade even as Iran is reported to have begun implementing an “emergency plan” to run the country under a prolonged war, semi-official Fars news reports.
- The White House has officially nominated former Fed Governor Kevin Warsh as the next Fed chair (four-year term) for when Jerome Powell’s Chair role ends in May, along with a fourteen-year Governor role. The nomination heads to the Senate but progress isn’t clear cut.
- Private payrolls rose by 63k in February, per the ADP Employment Report. This was the strongest initial reading since July 2025 and a beat vs the 50k expected, but its impact was offset by some mitigating factors that pointed to relatively subdued labor market conditions.
- Nonfarm payrolls are expected to increase 58k in February with gains coming entirely from the private sector, pulling back from a surprisingly strong January. One temporary impact known in advance was an additional 31k of striking workers over the payrolls reference period, the highest rise since late 2024. 32k workers will return in the March payrolls count.
OVERNIGHT DATA
MNI US Payrolls Preview: Softer, With Many Moving Parts
Download Full Report Here
Executive Summary: Nonfarm payrolls are expected to increase 58k in February with gains coming entirely from the private sector, pulling back from a surprisingly strong January. One temporary impact known in advance was an additional 31k of striking workers over the payrolls reference period, the highest rise since late 2024. 32k workers will return in the March payrolls count.
MNI US DATA: Final PMIs Point To Cool Growth In Q1 So Far
February's final reading of S&P Global flash PMIs brought some slight downgrades from the flash release, including both Services at 51.7 (52.3 flash, 52.7 prior) and Composite at 51.9 (52.3 flash, 53.0 prior).
- That confirmed the weakest Services reading since April 2025 (which coincided with the US Liberation Day tariff announcements), though this series has recently diverged from the ISM Services gauge which has been accelerating in recent months. Recall that S&P Manufacturing PMI fell in February to the lowest since July 2025 (51.6 final vs 52.4 prior).
- The Composite reading implies real GDP growth of just under 1.5% Q/Q annualized, per the report, which would be steady from 1.4% in Q4 (which was considered understated largely due to government shutdown-related factors).
MNI US DATA: Broad-Based Jump In ISM Services Comes With Cooling Prices
February's ISM Services report was much stronger than expected in almost all respects, with the headline PMI index rising to 56.1 (53.5 expected, 53.8 prior) for the best reading since July 2022. Combined with a positive Manufacturing reading for a second consecutive month (52.4, as reported earlier this week), the ISM reports are starting off 2026 signaling an acceleration in economic activity.
- New Orders jumped 5.5 points to a 17-month best 58.6 (53.5 expected), with Employment rising 1.5 points to a 12-month high 51.8 (50.6 expected). The Business Activity gauge rose 2.5 points to 59.9 for a 21-month high. The Supplier Deliveries index was the one component of the PMI that saw a pullback, dropping 0.3 points to 53.9, indicating less-slow deliveries.
MNI US DATA: ADP Payrolls Beat In February, But Underlying Details Don't Convince
Private payrolls rose by 63k in February, per the ADP Employment Report. This was the strongest initial reading since July 2025 and a beat vs the 50k expected, but its impact was offset by some mitigating factors that pointed to relatively subdued labor market conditions.
MNI FED: Beige Book: Economic Activity Dynamics Mixed
A summary of the February Beige Book (in image below) underlines only limited changes to district-by-district conditions since the previous edition (January). The biggest movers were in the descriptions of economic activity but they were mixed: growth worsened vs January in 4 districts (Boston, St Louis, Minneapolis, SF) though accelerated in 5 (Philadelphia, Cleveland, Atlanta, Chicago, Dallas) with 3 reporting similar dynamics as prior (Richmond, Kansas City, New York).
MARKETS SNAPSHOT
Key market levels of markets in late NY trade:
DJIA up 288.13 points (0.59%) at 48788.44
S&P E-Mini Future up 60 points (0.88%) at 6884.75
Nasdaq up 319.1 points (1.4%) at 22834.77
US 10-Yr yield is up 2.7 bps at 4.0862%
US Jun 10-Yr futures are down 8/32 at 112-24.5
EURUSD up 0.003 (0.26%) at 1.1643
USDJPY down 0.71 (-0.45%) at 157.03
WTI Crude Oil (front-month) up $0.65 (0.87%) at $75.20
Gold is up $52.13 (1.02%) at $5140.63
European bourses closing levels:
EuroStoxx 50 up 99.19 points (1.72%) at 5870.92
FTSE 100 up 83.52 points (0.8%) at 10567.65
German DAX up 414.71 points (1.74%) at 24205.36
French CAC 40 up 63.89 points (0.79%) at 8167.73
US TREASURY FUTURES CLOSE
Curve update:
3M10Y +2.259, 40.116 (L: 34.697 / H: 40.309)
2Y10Y -0.825, 54.096 (L: 53.388 / H: 56.838)
2Y30Y -1.855, 117.518 (L: 117.138 / H: 121.905)
5Y30Y -1.473, 104.765 (L: 104.494 / H: 108.128)
Current futures levels:
Jun 2-Yr futures down 3.125/32 at 104-9 (L: 104-08.875 / H: 104-12.125)
Jun 5-Yr futures down 6.25/32 at 109-12.25 (L: 109-11.75 / H: 109-19)
Jun 10-Yr futures down 8/32 at 112-24.5 (L: 112-23.5 / H: 113-03)
Jun 30-Yr futures down 11/32 at 116-30 (L: 116-22 / H: 117-16)
Jun Ultra futures down 13/32 at 119-28 (L: 119-16 / H: 120-17)
MNI US 10YR FUTURE TECHS: (M6) Maintains A Softer Tone
- RES 4: 114-19+ 2.236 projection of the Feb 19 - 23 - 25 price swing
- RES 3: 114-14 2.000 projection of the Feb 19 - 23 - 25 price swing
- RES 2: 114-08+ 1.764 projection of the Feb 19 - 23 - 25 price swing
- RES 1: 113-13+/114-06 Low Feb 27 / High Mar 2 and key resistance
- PRICE: 112-24+ @ 1450 ET Mar 04
- SUP 1: 112-16+ Low Mar 03
- SUP 2: 112-16 50-day EMA
- SUP 3: 112-11 61.8% retracement of the Jan 20 - Mar 2 bull leg
- SUP 4: 111-03+ Low Feb 12
Treasuries reversed sharply lower on Tuesday and the contract maintains a softer tone. The move down is allowing a recent overbought condition to unwind. Price has traded through 112-26, the 20-day EMA. The clear break of this average exposes the 50-day EMA, at 112-16. Note that a clear breach of the 50-day average would highlight a stronger reversal threat. Key resistance is at 114-06, the Mar 2 high.
SOFR FUTURES CLOSE
Current White pack (Mar 26-Dec 26):
Mar 26 -0.003 at 96.333
Jun 26 -0.030 at 96.440
Sep 26 -0.045 at 96.610
Dec 26 -0.045 at 96.730
Red Pack (Mar 27-Dec 27) -0.06 to -0.05
Green Pack (Mar 28-Dec 28) -0.055 to -0.045
Blue Pack (Mar 29-Dec 29) -0.045 to -0.035
Gold Pack (Mar 30-Dec 30) -0.035 to -0.03
REFERENCE RATES
US TSYS: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 3.70% (-0.01), volume: $3.310T
- Broad General Collateral Rate (BGCR): 3.67% (-0.02), volume: $1.381T
- Tri-Party General Collateral Rate (TCR): 3.67% (-0.02), volume: $1.338T
- (rate, volume levels reflect prior session)
STIR: FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 3.64% (+0.00), volume: $101B
- Daily Overnight Bank Funding Rate: 3.64% (+0.01), volume: $175B
FED Reverse Repo Operation
RRP usage slips to $0.877B with 8 counterparties this afternoon vs. $1.203B Tuesday. Compares to last year's highest excess liquidity measure: $460.731B on June 30.
MNI PIPELINE: Corporate Bond Update: $8.5B Eaton Corp 6Pt Launched
- Date $MM Issuer (Priced *, Launch #)
- 03/04 $8.5B #Eaton Corp $1.5B 2Y +35, $1.5B 3Y +43, $1.5B 5Y +58, $1B 7Y +65, $2B 10Y +75, $1B 30Y +78
- 03/04 $6.8B #Fidelity National $2B 2Y +95, $2.3B 3Y +105, $500M 3Y SOFR+121, $2B 5Y +115
- 03/04 $1.2B #Canadian Pacific Railway $600M 3Y +50, $600M 30Y +85
- 03/04 $1B #Federal Home Loan 2Y +3.5
- 03/04 $650M #Entergy Mississippi 10Y +97
- 03/04 $500M #Duke Energy Indiana WNG 10Y +90
MNI BONDS: EGBs-GILTS CASH CLOSE: Geopolitical Relief Rally
European yields mostly fell Wednesday, with Gilts outperforming Bunds.
- Nascent signs of de-escalation in the Middle East conflict helped yields pull back sharply in early trade.
- There was notable outperformance at the front end of curves in contrast to the prior two sessions' energy price related bear-flattening sell-off across EGBs and Gilts.
- Various geopolitical headlines buffeted energy prices (and thus FI) throughout, though on net Gilts would see more relief than Bunds given the former's underperformance earlier in the week, particularly at the front-end.
- In data, final February PMIs largely confirmed flashes; in new data, Italian Composite PMI hit a 3-month high while Spain's report was indicative of fading growth momentum.
- Yields would close near the lows, with the German curve twist steepening on the day while the UK's bull steepened.
- Periphery/semi-core EGB spreads tightened 2-4bp, reversing the prior session's risk-off move.
- On Thursday's calendar are Spanish and French industrial production data and Italian and Eurozone retail sales, in addition to the UK DMP survey. There are also appearances by ECB's Rehn, Nagel, and Lagarde.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 2.5bps at 2.13%, 5-Yr is down 1bps at 2.369%, 10-Yr is down 0.2bps at 2.75%, and 30-Yr is up 1.5bps at 3.401%.
- UK: The 2-Yr yield is down 2.9bps at 3.705%, 5-Yr is down 3.1bps at 3.93%, 10-Yr is down 3bps at 4.441%, and 30-Yr is down 1.7bps at 5.157%.
- Italian BTP spread down 2.5bps at 67.8bps / French OAT down 3.4bps at 60.7bps
MNI FOREX: USD Only Slightly Lower Despite Risk Recovery, AUD and NZD Outperform
- Risk sentiment has stabilised on Wednesday, with crude prices comfortably off their most recent extremes and major equity indices rallying back strongly. Resultingly, it has been a considerably more stable session for G10 FX, although perhaps surprisingly, the USD index sits just 0.2% lower on the session and is consolidating much of the week’s prior advance.
- Understandably, the likes of AUD and NZD are recovering well and stand around 1.8% and 1.6% above their Tuesday lows respectively.
- For AUDUSD, bullish conditions remain intact after support at the 50-day EMA held yesterday, intersecting at 0.6925. Short-term parameters are well defined, with a cluster of significant resistance building between 0.7125-50. Overnight, AU GDP came in slightly above expectations. At face value this keeps March RBA tightening risks in play, as the central bank may view it needs to hike more to curb growth momentum, however, the detail showed slowing in private domestic demand versus Q3 outcomes.
- Several aspects have helped provide a moderate reprieve for the Japanese yen on Wednesday, allowing USDJPY to edge further away from yesterday’s 157.97 high. These include hawkish tilting remarks from BOJ Governor Ueda, lingering FX intervention risks and stalling momentum above the post-election highs above 157.75. Initial firm support for USDJPY lies much lower at 154.00, the Feb 23 low.
- Elsewhere, EUR, GBP and CHF all kept very narrow ranges against the dollar. Swiss CPI did little to move the needle, although it is worth noting that despite the Swiss Franc unwind from earlier in the week, EURCHF currently resides within 50 pips of the 0.9025 cycle lows – with the potential to test the SNB’s resolve.
- Second-tier European data will precede the ECB minutes on Thursday, before US jobless claims. All focus will then turn to Friday’s Us employment report.
THURSDAY DATA CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 05/03/2026 | 0700/0800 | *** |  SE | Flash Inflation Report |
| 05/03/2026 | 0700/0800 | *** | SE | Flash Inflation Report |
| 05/03/2026 | 0745/0845 | * |  FR | Industrial Production |
| 05/03/2026 | 0800/0900 | ** |  ES | Industrial Production |
| 05/03/2026 | 0800/0900 | ** |  CH | Unemployment |
| 05/03/2026 | 0830/0930 | ** |  IT | S&P Global Final Italy Construction PMI |
| 05/03/2026 | 0830/0930 | ** |  DE | S&P Global Final Germany Construction PMI |
| 05/03/2026 | 0830/0930 | ** |  EU | S&P Global Final Eurozone Construction PMI |
| 05/03/2026 | 0850/0950 | EU | ECB de Guindos in Conversation at IIF European Investment Summit | |
| 05/03/2026 | 0900/1000 | * | IT | Retail Sales |
| 05/03/2026 | 0930/0930 | ** |  GB | S&P Global/CIPS Construction PMI |
| 05/03/2026 | 0930/0930 | *** | GB | BOE Decision Making Panel |
| 05/03/2026 | 1000/1100 | ** | EU | EZ Retail Sales |
| 05/03/2026 | 1000/1000 | ** | GB | Gilt Outright Auction Result |
| 05/03/2026 | - |  CN | National People's Congress | |
| 05/03/2026 | 1330/0830 | ** |  US | WASDE Weekly Import/Export |
| 05/03/2026 | 1330/0830 | *** | US | Jobless Claims |
| 05/03/2026 | 1330/0830 | ** | US | Import/Export Price Index |
| 05/03/2026 | 1330/0830 | ** | US | Preliminary Non-Farm Productivity |
| 05/03/2026 | 1530/1030 | ** | US | Natural Gas Stocks |
| 05/03/2026 | 1630/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 05/03/2026 | 1630/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 05/03/2026 | 1700/1800 | EU | ECB Lagarde Lecture on Global Risk | |
| 05/03/2026 | 1815/1315 | US | Fed's Michelle Bowman |
