MNI ASIA OPEN: Foreign Countries Still Mull Tariff Response

EXECUTIVE SUMMARY

• MNI BRIEF: Fed's Logan Wants Lid On Inflation Expectations
• MNI US-EU: VdL Confirms 90 Day Pause On Retaliatory Tariffs
• MNI JAPAN: Econ Min To Visit US For Talks w/Bessent As Soon As Next Week-NHK
• MNI US: Trump Says Reconcilliation Bill "Coming Along Well" Ahead Of 2nd Budget Vote
• MNI US DATA: Jobless Claims Still Relatively Resilient
• MNI US DATA: CPI Trends Cool Faster Than Expected

US

MNI BRIEF: Fed's Logan Wants Lid On Inflation Expectations

Federal Reserve Bank of Dallas President Lorie Logan said Thursday the fed funds rate is well-positioned, but highlighted the importance of keeping tariffs from boosting inflation expectations. "For now, I believe the stance of monetary policy is well positioned," she said in opening remarks. "To sustainably achieve both of our dual-mandate goals, it will be important to keep any tariff-related price increases from fostering more persistent inflation." 

NEWS

MNI US: Trump Says Reconcillation Bill "Coming Along Well" Ahead Of 2nd Budget Vote

President Donald Trump said in a statement on Truth Social the, "Big, Beautiful Bill" is "coming along really well" ahead of House Speaker Mike Johnson's (R-LA) second attempt at passing a Senate-approved budget blueprint to underpin Trump's tax and spending agenda. Trump added: "Republicans are working together nicely" downplaying a rebellion by conservative Republicans that forced Johnson to abandon a budget vote yesterday.

MNI TARIFFS: Hassett-I Will Present List Of Deal Priorities To Trump Today

Director of the National Economic Council Kevin Hassett speaking on CNBC regarding the 90 day tariff pause. Claims "There's a big inventory of deals that are close to the finish line". Says the bond market tumult "may have contributed to the tariff decision, but did not cause a panic move." Hassett: "We have set up a process for tariff deals [that] can be orderly," and that negotiations in 90 days are "doable". Regarding China, Hassett says conversations have not begun yet. "China is going to have to figure something out and my guess is it will be them reaching out to us and looking to set up talks." Does not say when he thinks this might happen.

MNI US-EU: EU To Assess US Tariff Pause Before Announcing Next Steps-Spox

In the wake of US President Donald Trump's pause on 'reciprocal' tariffs for 90 days, trade spox for the European Commission Olof Gill says the Commission "The European Commission will now take the necessary time to assess this latest development, in close consultation with our member states and industry, before deciding on the next step." Says "The EU remains committed to constructive negotiations with the United States, with the goal of achieving frictionless and mutually beneficial trade". The EU retaliatory tariffs related to the US' imposition of steel and aluminium levies last month were confirmed on 9 April and due to come into force 15 April. It remains to be seen whether these will be delayed. In a statement earlier this morning, Commission President Ursula von der Leyen called the pause "an important step towards stabilising the global economy".

MNI US-EU: VdL Confirms 90 Day Pause On Retaliatory Tariffs

European Commission President Ursula von der Leyen confirms earlier reports (see 'US-EU: Wires-EU Considers 90-Day Pause To 15 April Countermeasures: Diplos', 1108BST) of a 90 day pause on the EU's tariffs responding to US steel and aluminium levies, that were due to come into force on 15 April. VdL: "We took note of the announcement by President Trump. We want to give negotiations a chance. While finalising the adoption of the EU countermeasures that saw strong support from our Member States, we will put them on hold for 90 days. If negotiations are not satisfactory, our countermeasures will kick in. Preparatory work on further countermeasures continues. As I have said before, all options remain on the table."

MNI GERMANY: CSU Approves Coalition Deal; SPD Migration Group Advocates 'No' Vote

The Christian Social Union (CSU), the Bavarian sister party of chancellor-in-waiting Friedrich Merz's centre-right Christian Democratic Union (CDU) has become the first party to formally approve the programme for gov't and give its go-ahead for the formation of a 'grand coalition' (GroKo) with the centre-left Social Democrats. CSU leader and Bavaria's Minister-President Markus Soeder said 'unanimous' approval was given in a conference call earlier today held between the CSU's party executive, it's parliamentary group in the Bundestag, and it's group in the Bavarian state parliament. 

MNI JAPAN: Econ Min To Visit US For Talks w/Bessent As Soon As Next Week-NHK

NHK reporting that Japanese Economy Minister Ryosei Akazawa will travel to the US "as early as next week" to hold a meeting with Treasury Secretary Scott Bessent, although there is no set date yet. Akazawa says that the Japanese gov't views the US imposition of tariffs on steel and autos as "regrettable" and is still calling for a review of the measures. Nevertheless, the Trump administration's pullback from 'reciprocal' tariffs of 24% for 90 days offers Japan a window to seek an agreement that would avoid significant trade upheaval. 

MNI US TSYS: Post-Tariff Pause Sentiment Shaken, Not Stirred

• Treasuries look to finish mixed Thursday, curves twist steeper (2s10s +13.643 at 55.182) with Bonds weaker (USM5 -19 at 113-30 vs. 116-11 high) after making strong gains earlier. Jun'25 10Y futures trade +12 at 110-22.5 after the bell, well off 111-11 session high.
• Treasury futures extend rally then pared gains after lower than expected CPI inflation measures, while weekly claims are in-line, continuing claims lower than expected w/ prior down-revised.
• Core CPI surprised notably lower in March at 2.79% Y/Y (vs consensus firmly centered on 3.0%) after the 3.12% Y/Y in Feb. It’s the lowest since Mar 2021. Recent run rates remain hotter, suggesting some upward momentum ahead in the Y/Y, but to a much lesser extent than was expected to have been the case.
• Initial claims were as expected at 223k (sa, cons 223k) in the week to Apr 5 after an unrevised 219k. Continuing claims meanwhile pulled back to 1850k (sa, cons 1884k) in the week to Mar 29 after the previous week’s fresh high since late 2021 was trimmed to 1893k (1903k)
• Treasury futures firmed after the $22B 30Y auction re-open (912810UG1) stopped through: 4.813% high yield vs. 4.838% WI; 2.43x bid-to-cover vs. 2.37x in the prior month. Peripheral measures has indirect take-up 61.88% vs. 60.45% prior; direct bidder take-up 25.82% vs. 22.65% prior; primary dealer take-up 12.30% vs. 16.89% prior.
• Cross asset: Stocks broadly weaker but off lows, confidence shaken after Wednesday's post-tariff pause rally, knee jerk trade policy weighing on sentiment. Sharp reversal in USD index, ongoing pessimism towards the greenback has prompted the USD index to print fresh cycle lows below 101.00.
• Aside from headline risk, focus turns to Friday's data: PPI at 0830ET University of Michigan Sentiment at 1000ET.

OVERNIGHT DATA

MNI US DATA: Jobless Claims Still Relatively Resilient

Jobless claims data were on balance a little better than expected, with initial in line and continuing surprising lower after a 3+ year high. The data continue to point to a moderation in rehiring activity rather than anything sharper. 

• Initial claims were as expected at 223k (sa, cons 223k) in the week to Apr 5 after an unrevised 219k.
• The four-week average was also unchanged at 223 for a second reading at its lowest since mid-Feb.
• Continuing claims meanwhile pulled back to 1850k (sa, cons 1884k) in the week to Mar 29 after the previous week’s fresh high since late 2021 was trimmed to 1893k (1903k) – although that’s still technically a 3+ year high after three readings of 1892k between Nov-Feb.
• The absolute level of NSA continuing claims is higher than recent years – it was last higher for this time of year in 2018 – but it’s still a measured relative increase as implied by the SA data. 

MNI US DATA: CPI Trends Cool Faster Than Expected

Looking over a longer basis, core CPI surprised notably lower in March at 2.79% Y/Y (vs consensus firmly centered on 3.0%) after the 3.12% Y/Y in Feb. It’s the lowest since Mar 2021. Recent run rates remain hotter, suggesting some upward momentum ahead in the Y/Y, but to a much lesser extent than was expected to have been the case.

MNI US DATA: CPI OER Above All Analyst Expectations, Primary Rents Higher Side

• OER: 0.40% vs analyst av of 0.30% (range 0.27-0.35) after 0.28%. Strongest monthly pace since Oct.
• It can be a volatile series from month-to-month though.
• Primary rents: 0.33% vs analyst av 0.30% (range 0.26-0.35) after 0.28%
• The weighted average of the two accelerated to 0.39% M/M from 0.28%, after four months averaging 0.28% that had been exactly in line with a pre-pandemic rate (2019 average for example).

MNI US DATA: Main Inflation Aggregates All Surprise Lower Vs Consensus

March's main inflation aggregates all surprised lower, with a notable below-expected supercore - see table below.

• The only upside surprises in the headline (non-core) categories were food rising at double the expected pace (0.44% M/M vs 0.21% median), though gas and overall energy prices fell more or less in line.

MNI US DATA: Extremely Soft Supercore CPI In March

• Core services excl OER & primary rents ('supercore'): -0.241% M/M after 0.215%. Latest 3mth av of 0.244%
• Core services excl all shelter: -0.069% M/M after 0.26%. Latest 3mth av of 0.301%
• Limited analyst estimates for ex OER & rents had averaged 0.26% M/M, ranging from 0.03 to 0.36

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA down 1060.75 points (-2.61%) at 39545.76
S&P E-Mini Future down 191.75 points (-3.49%) at 5301.25
Nasdaq down 745.6 points (-4.4%) at 16380.33
US 10-Yr yield is up 6 bps at 4.3917%
US Jun 10-Yr futures are up 9/32 at 110-19.5
EURUSD up 0.0235 (2.15%) at 1.1183
USDJPY down 3.02 (-2.04%) at 144.75
WTI Crude Oil (front-month) down $2.26 (-3.62%) at $60.08
Gold is up $93.19 (3.02%) at $3175.91

European bourses closing levels:
EuroStoxx 50 up 196.78 points (4.26%) at 4818.92
FTSE 100 up 233.77 points (3.04%) at 7913.25
German DAX up 891.85 points (4.53%) at 20562.73
French CAC 40 up 263 points (3.83%) at 7126.02

US TREASURY FUTURES CLOSE

3M10Y +7.625, 6.488 (L: -9.838 / H: 8.503)
2Y10Y +13.709, 55.257 (L: 38.569 / H: 57.876)
2Y30Y +19.909, 102.187 (L: 78.628 / H: 105.321)
5Y30Y +14.355, 83.325 (L: 67.292 / H: 86.018)
Current futures levels:
Jun 2-Yr futures up 6.75/32 at 103-23 (L: 103-16.625 / H: 103-26.5)
Jun 5-Yr futures up 10.25/32 at 108-0 (L: 107-24.5 / H: 108-12.25)
Jun 10-Yr futures up 9/32 at 110-19.5 (L: 110-16 / H: 111-11)
Jun 30-Yr futures down 27/32 at 113-22 (L: 113-17 / H: 116-11)
Jun Ultra futures down 1-11/32 at 117-17 (L: 117-09 / H: 121-13)

MNI US 10YR FUTURE TECHS: (M5) Trendline Support Remains Intact For Now

• RES 4: 114-10   High Apr 7 and the bull trigger 
• RES 3: 113-09+ 76.4% retracement of the Apr 7 - 9 sell-off
• RES 2: 112-21+ 61.8% retracement of the Apr 7 - 9 sell-off  
• RES 1: 112-08   High Apr 8
• PRICE:‌‌ 110-19+ @ 1550ET Apr 10
• SUP 1: 110-01   Intraday low
• SUP 2: 109-30+ Trendline support drawn from the Jan 13 low 
• SUP 3: 109-13+ Low Feb 24 
• SUP 4: 108-26+ 76.4% of the Jan 13 - Apr 7 bull cycle    

Treasury futures continue to trade closer to their recent lows following this week’s move lower. Attention is on trendline support at 109-30+, drawn from the Jan 13 low. A clear break of this support would strengthen a bearish threat. Note that the steep sell-off could still be a corrective pullback that has allowed an oversold trend condition to unwind. Initial resistance to watch is 112-08, the Aug 8 high. A break would highlight a possible early reversal.

SOFR FUTURES CLOSE

Jun 25 +0.080 at 95.995
Sep 25 +0.120 at 96.325
Dec 25 +0.145 at 96.525
Mar 26 +0.155 at 96.650
Red Pack (Jun 26-Mar 27) +0.125 to +0.155
Green Pack (Jun 27-Mar 28) +0.105 to +0.120
Blue Pack (Jun 28-Mar 29) +0.075 to +0.10
Gold Pack (Jun 29-Mar 30) +0.040 to +0.065

SOFR FIXES AND PRIOR SESSION REFERENCE RATES
​​​​​​​
SOFR Benchmark Settlements:

• 1M +0.00788 to 4.32880 (+0.00896/wk)
• 3M +0.01206 to 4.24171 (-0.01727/wk)
• 6M +0.01705 to 4.06999 (-0.05553/wk)
• 12M +0.01736 to 3.82210 (-0.04113/Wk)

US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 4.42% (+0.02), volume: $2.663T
• Broad General Collateral Rate (BGCR): 4.40% (+0.03), volume: $1.052T
• Tri-Party General Collateral Rate (TCR): 4.40% (+0.03), volume: $1.011T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $92B
• Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $241B

FED Reverse Repo Operation

RRP usage retreats to $129.950B this afternoon from $168.115B on Wednesday. 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 30.

MNI PIPELINE: Corporate Bound Update: $5.25B to Price Thursday

• Date $MM Issuer (Priced *, Launch #)
• 04/10 $2.5B #Japan Tobacco $800M +3Y +105, $900M +5Y +125, $800M +10Y +150
• 04/10 $1.5B #Diageo Inv $750M +5Y +110, $750M 10y +130
• 04/10 $750M #Keysight Technologies +5Y +140
• 04/10 $500M *Autozone 5Y +115

MNI BONDS: EGBs-GILTS CASH CLOSE: Long Ends Outperform Post-US Tariff Pause

European bonds went in divergent directions Thursday, with Gilts rallying strongly but Bunds relatively flat on the day.

• Core instruments gained in early trade in a follow through from Wednesday's "pause" of US reciprocal tariffs on most economies, including the EU and UK.
• Long-end instruments outperformed, gaining steam in afternoon trade first on a soft US inflation number, and as equities and oil pulled back sharply with tariff-related economic concerns resurfacing.
• BOE's Breeden told an MNI event "risks of a further sharp correction to risky asset prices to remain high."
• Gilts outperformed overall, with the UK curve bull flattening, in something of a relief rally after recent underperformance. The German curve twist flattened, with short-end yields backing up.
• Periphery/semi-core EGB spreads tightened, once again with higher-beta instruments outperforming (ie BTP).
• Friday's schedule includes UK monthly activity data and an appearance by ECB's Lagarde.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 6.1bps at 1.786%, 5-Yr is up 1.1bps at 2.113%, 10-Yr is down 1.1bps at 2.58%, and 30-Yr is down 0.5bps at 2.96%.
• UK: The 2-Yr yield is down 8.8bps at 3.903%, 5-Yr is down 14.3bps at 4.078%, 10-Yr is down 13.6bps at 4.643%, and 30-Yr is down 15.2bps at 5.428%.
• Italian BTP spread down 4.8bps at 124.3bps / French down 4.2bps at 76.4bps  

MNI FOREX: Broad Greenback Pressure Prompts Fresh Cycle Lows for USD Index

• Thursday’s session was categorised by some sharp reversals lower for both US equities and the US dollar. While major US equity benchmarks have not entirely erased the prior session gains, the USD index has, and the ongoing pessimism towards the greenback has prompted the USD index to print fresh cycle lows below 101.00. Weakness was assisted by a set of softer-than-expected CPI data from the US.
• With the broad greenback weakness really gathering steam, this allowed EURUSD (+2.66%) to trade above the 1.12 handle for the first time since September last year. Importantly, a cluster of daily highs around this mark have been breached, most notably at 1.1214, the Sep 25 high. Above here, 1.1276 represents the 2023 highs for the pair.
• Meanwhile, it is the Swiss Franc which continues to screen as the best performing currency in G10, now up 3.9% against the dollar as we approach the APAC crossover. USDCHF has broken the 2023 lows at 0.8333, of which downside momentum has been exacerbated on the break. The pair currently trades at fresh ten-year lows of 0.8238 and below here, markets will look to 0.8099, the 76.4% retracement of the Jan 15 '15 - Dec 15 '16 recovery.
• USDJPY traded to within 2 pips of Wednesday’s 144.00 low, which has managed to cap the downside for now. Overall, this week’s move below 144.56, the Apr 4 low and bear trigger keeps the market’s attention on the significance of the technical break, which confirms a resumption of the downtrend. Below here markets will look to 143.43 - Low Oct 2 ’24.
• Friday’s calendar highlights include UK activity data and US PPI figures.

FRIDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
11/04/2025	0600/0700	**	GB	UK Monthly GDP
11/04/2025	0600/0800	***	SE	Final Inflation Report
11/04/2025	0600/0700	**	GB	Trade Balance
11/04/2025	0600/0700	**	GB	Index of Services
11/04/2025	0600/0700	***	GB	Index of Production
11/04/2025	0600/0800	***	DE	HICP (f)
11/04/2025	0600/0700	**	GB	Output in the Construction Industry
11/04/2025	0700/0900	***	ES	HICP (f)
11/04/2025	0945/1145		EU	ECB's Lagarde at Eurogroup Press Conference
11/04/2025	-	***	CN	Money Supply
11/04/2025	-	***	CN	New Loans
11/04/2025	-	***	CN	Social Financing
11/04/2025	-		GB	BoE's Saporta on 'How financial crisis reshape market and strategies’
11/04/2025	1230/0830	***	US	PPI
11/04/2025	1400/1000	***	US	U. Mich. Survey of Consumers
11/04/2025	1400/1000	**	US	University of Michigan Surveys of Consumers Inflation Expectation
11/04/2025	1400/1000		US	St. Louis Fed's Alberto Musalem
11/04/2025	1500/1100		US	New York Fed's John Williams
11/04/2025	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly
11/04/2025	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly