MNI ASIA OPEN: Pakistan's 2 Week Delay an Off Ramp for Trump?

EXECUTIVE SUMMARY

• MNI US TSYS: Pakistan Seeks Two-Week Deadline Delay for Diplomatic Efforts
• RBI MNI Preview: Firmly on Hold, Growth Challenges Ahead
• MNI RBNZ Preview-April 2026: Ongoing Pause, Weak Outlook
• MNI FED: Goolsbee Sees Inflation Similarities With 2021/22, Cautious On Economy
• MNI FED: Williams Keeps Dovish Lean With Underlying Inflation View Roughly Unchanged
• MNI US DATA: Relatively Limited Uptick In NY Fed Consumer Inflation Expectations

US

MNI FED: Goolsbee Sees Inflation Similarities With 2021/22, Cautious On Economy

Chicago Fed’s Goolsbee (’27 voter, historically dovish but a hawkish dissenter in Dec 2025) mentioned the eery current similarities with the 2021/22 inflationary episode. He deems the labor market to be stable but not great whilst attributing the high youth unemployment rate to low hiring rather than AI-directly. Combined with being cautious/nervous about the economy at the moment, he is still trying to work out what is the appropriate action. 

MNI FED: Williams Keeps Dovish Lean With Underlying Inflation View Roughly Unchanged

Speaking on Bloomberg TV, New York Fed's Williams (permanent voter, leaning dove) repeated that his view of underlying inflation is roughly where's it been for a while, with little sign of impact from the ~$10/bbl increase in WTI prices since he last spoke on Mar 30. He has trimmed his GDP growth forecast to 2-2.5% from close to 2.5% on Mar 30, but he continues to see monetary policy as really well positioned.

MNI FED: Citi Pushes Back Cut Timing Again, Next In September As Labor Market Cools

Citi analysts on Monday pushed back their call for the next Fed rate cut to September from June, saying that a "familiar seasonal pattern in labor market data is repeating" that will ultimately see labor market weakness sufficient for the FOMC to resume easing later in the year. The new view, following the stronger-than-anticipated March employment report, is for cuts in September, October and December. 

CENTRAL BANKS PREVIEWS

MNI RBNZ Preview-April 2026: Ongoing Pause, Weak Outlook

• The RBNZ is unanimously expected on Bloomberg to leave rates at 2.25% when the MPC announces its decision on 8 April. It continues to believe that ongoing substantial excess capacity will put downward pressure on inflation bringing it back to the band. This view is likely to be maintained this month even with apparent upside risks to inflation in Q1 seen before the start of the Iran War, which has now exacerbated the situation. However, Governor Breman said in March that the impact of the conflict on fuel prices is currently assumed to be temporary but that view depends on the duration. For now though the RBNZ is in no hurry to tighten and is content to watch and wait.
• Hidden PDF

RBI MNI Preview: Firmly on Hold, Growth Challenges Ahead

• The Reserve Bank of India is set to announce its first monetary policy decision of the 2026-27 fiscal year tomorrow. The meeting comes at a pivotal moment. Whilst India was coasting through a phase of high growth and low inflation earlier this year, the sudden escalation of the Middle East conflict and the oil spike have completely rewritten the script for Governor Malhotra and the MPC. Markets are virtually unanimous that the RBI will keep the Repo Rate unchanged at 5.25% though swaps markets are painting a different picture, with hikes now priced in over the near term. A hold would mark the fourth consecutive meeting with no change, but it is in the forward guidance where focus will lie.
• Hidden PDF

NEWS

MNI US-CHINA: US Not Looking For "Confrontation" With China - USTR Greer

United States Trade Representative Jamieson Greer told reporters the US is “not looking for a massive confrontation” with China, per Reuters. Greer added the US is weighing up a ‘board of trade mechanism’ in dealing with China. Greer said the U is looking to maintain “stable relations”, but are “not at [a] point where US can talk about investment programs with China."

MNI IRAN: WSJ Suggests Iran Has Cut Off Direct Comms With US: State of Play Unclear -- Iran has cut off direct communications with the U.S. over President Trump's threat to destroy Iran's "whole civilization" Monday morning, though talks with cease-fire mediators continue, Middle Eastern officials said. The move has temporarily complicated efforts to make a deal by Trump's 8 p.m. deadline Tuesday but hasn't ended the talks, the officials said".

MNI Iran Reiterates No Negotiations With US

Reuters running comments from a “senior Iranian source”. Highlights below:

• "Pakistan continues to convey messages, but U.S. has not changed its tone"
• "There are no negotiations with U.S., which wants Iran to surrender under pressure"
• "Flexibility will be shown when we see flexibility from the U.S. side"
• "What U.S. wants is the reopening of Hormuz Strait, Iran will not open it in exchange for 'empty promises'"
• "If U.S. attacks Iran’s power plants the entire region and Saudi Arabia will fall into complete darkness"
• "Qatar conveyed Iran's message about striking power plants to U.S. on Monday"
• "If the situation gets out of control, Iran’s allies will also close Bab el-Mandeb waterway" 

MNI IRAN: Axios-Sr. US Official: US Strikes Military Targets On Kharg Island

As noted previously, Axios reports that according to an unnamed senior US official, the US military has conducted strikes on military targets on Iran's Kharg Island. Notably, the US official explicitly stated that it was Iranian military targets on Kharg that were hit, not oil infrastructure. Previous US/Israeli strikes on Kharg also avoided the substantial oil facilities on the island's south side.

MNI IRAN: Reports Suggest Tehran Showing Little Sign Of Offering Concessions To US

The past hour has seen a flurry of headlines indicating further escalation of rhetoric ahead of US President Donald Trump's 20:00ET deadline.  Reuters reports comments from an unnamed senior Iranian official, claiming that Tehran has set its preconditions for talks to reach a lasting peace. 

US TSYS

MNI US TSYS: Pakistan Seeks Two-Week Deadline Delay for Diplomatic Efforts

• Late plea by Pakistan helped Treasuries extend session highs - looking to extend tonight's 2000ET deadline by two weeks to continue diplomatic efforts for a peaceful settlement. TYM6 trades +7.5 to 111-01.5 high. Crude dropped to $112/bbl before bouncing back to appr $113.25/bbl.
• Iran war rhetoric certainly kept markets on edge ahead of tonight's 2000ET deadline, Trump social media post saying of Iran "a whole civilization will die tonight" with even the Pope weighing in calling it "truly unacceptable".
• Treasuries see-sawed off session lows earlier, curves twisted steeper (2s10s +2.735 at 50.404) with the short end buoyed by a strong $58B 3Y Tsy note auction (3.897% high yield vs. 3.910% WI).
• New York Fed's Williams (permanent voter, leaning dove) repeated that his view of underlying inflation is roughly where's it been for a while, with little sign of impact from the ~$10/bbl increase in WTI prices since he last spoke on Mar 30.
• Headline durable orders remained volatile, dropping 1.4% M/M (consensus -1.2%), but this was driven by a 29% drop in nondefense aircraft/parts (poor new orders reported by Boeing had been anticipated, as reflected in the consensus).
• Weekly ADP private sector employment showed little sign of the US-Israel-Iran war impeding job creation with March increasingly covered. Weekly employment increased by an average 26k in the four weeks to Mar 21 after 15.25k to Mar 14 (filled in today after last week’s full month update) and an unrevised 10k to Mar 7.

OVERNIGHT DATA

MNI US DATA: Solid Core Durables Orders Confirm Equipment Investment To Boost GDP

A better set of February core durable goods readings was offset by downward revisions to January's data, but the overall near-term outlook for equipment investment remains solid. Headline durable orders remained volatile, dropping 1.4% M/M (consensus -1.2%), but this was driven by a 29% drop in nondefense aircraft/parts (poor new orders reported by Boeing had been anticipated, as reflected in the consensus). Prior was revised down from flat to -0.5%.

MNI US DATA: Weekly ADP Sees Strongest Increase Under New Series

Weekly ADP private sector employment showed little sign of the US-Israel-Iran war impeding job creation with March increasingly covered. Weekly mployment increased by an average 26k in the four weeks to Mar 21 after 15.25k to Mar 14 (filled in today after last week’s full month update) and an unrevised 10k to Mar 7.

MNI US DATA: Relatively Limited Uptick In NY Fed Consumer Inflation Expectations

The NY Fed consumer survey on balance saw relatively contained increases in inflation expectations in March, with the 1Y back to December rates and keeping within a short-lived peak in April 2025 on tariff announcements at the time. 

MNI US DATA: Redbook Seals Solid March Retail Sales Growth Despite War Impact

The March retail month closed strongly, per the Johnson Redbook Index, which rose by 7.6% Y/Y in the week ending April 4. vs 6.9% the prior week. For March as a whole (it's considered a 5-week month by retailers covered in the index), sales were up 6.8% Y/Y, below retailers' targeted 7.4% gain but steady from February and joint-highest since 2022.

MNI CANADA DATA: Ivey PMI Sees Soaring Prices, Still Consistent With Slow Q1 GDP

The Ivey Purchasing Managers Index pulled back sharply in March to 49.7, a 4-month low, from 56.6 in February which had been a 19-month high. This is a volatile survey month-to-month so we wouldn't normally take much signal from such a decline, but the subcomponents read similarly to the US ISM Services for March which saw war-impacted prices paid and activity readings.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA down 233.44 points (-0.5%) at 46434.99
S&P E-Mini Future down 23.25 points (-0.35%) at 6627.75
Nasdaq down 117.1 points (-0.5%) at 21878.88
US 10-Yr yield is down 1 bps at 4.3208%
US Jun 10-Yr futures are up 6/32 at 111-0
EURUSD up 0.0045 (0.39%) at 1.1586
USDJPY up 0.02 (0.01%) at 159.7
WTI Crude Oil (front-month) up $1.22 (1.09%) at $113.65
Gold is up $38 (0.82%) at $4687.47

European bourses closing levels:
EuroStoxx 50 down 59.64 points (-1.05%) at 5633.22
FTSE 100 down 87.5 points (-0.84%) at 10348.79
German DAX down 246.49 points (-1.06%) at 22921.59
French CAC 40 down 53.65 points (-0.67%) at 7908.74

US TREAURY FUTURES CLOSE

Curve update:
3M10Y +0.584, 62.151 (L: 58.492 / H: 66.333)
2Y10Y +2.537, 50.206 (L: 47.077 / H: 50.75)
2Y30Y +4.948, 108.216 (L: 103.163 / H: 109.145)
5Y30Y +4.22, 94.408 (L: 90.253 / H: 95.107)
Current futures levels:
Jun 2-Yr futures up 2/32 at 103-22 (L: 103-18.25 / H: 103-22.5)
Jun 5-Yr futures up 3.75/32 at 108-3.25 (L: 107-25.75 / H: 108-04.25)
Jun 10-Yr futures up 6/32 at 111-0 (L: 110-17.5 / H: 111-01.5)
Jun 30-Yr futures down 4/32 at 113-24 (L: 113-01 / H: 114-01)

MNI US 10YR FUTURE TECHS: (M6) Bear Threat Remains Present

• RES 4: 112-24+ High Mar 10
• RES 3: 112-07   High Mar 18
• RES 2: 111-22   50-day EMA
• RES 1: 111-14+ High Apr 1
• PRICE:‌‌ 110-27 @ 11:24 BST Apr 7
• SUP 1: 110-16/109-24   Low Apr 2 / Low Mar 27 and the bear trigger
• SUP 2: 109-22+ 1.764 proj of the Mar 10 - 13 - 18 price swing
• SUP 3: 109-12   2.000 proj of the Mar 10 - 13 - 18 price swing
• SUP 4: 109-01+ 2.236 proj of the Mar 10 - 13 - 18 price swing

The recovery in Treasuries from the Mar 27 low appears corrective. The contract has pierced resistance at 111-05+, the 20-day EMA. A clear break of this average would expose a more important resistance at the 50-day EMA, at 111-22. Note that recent gains are allowing an oversold condition to unwind. However, a clear break of the 50-day EMA would signal a stronger reversal threat. The bear trigger is 109-24, the Mar 27 low.

SOFR FUTURES CLOSE

Current White pack (Jun 26-Mar 27):
Jun 26 +0.010 at 96.325
Sep 26 +0.035 at 96.320
Dec 26 +0.050 at 96.350
Mar 27 +0.045 at 96.365
Red Pack (Jun 27-Mar 28) +0.035 to +0.040
Green Pack (Jun 28-Mar 29) +0.030 to +0.030
Blue Pack (Jun 29-Mar 30) +0.025 to +0.030
Gold Pack (Jun 30-Mar 31) +0.025 to +0.025

REFERENCE RATES
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US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 3.65% (-0.01), volume: $3.217T
• Broad General Collateral Rate (BGCR): 3.63% (+0.00), volume: $1.299T
• Tri-Party General Collateral Rate (TCR): 3.63% (+0.00), volume: $1.271T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 3.64% (+0.00), volume: $103B
• Daily Overnight Bank Funding Rate: 3.64% (+0.00), volume: $192B

FED Reverse Repo Operation

RRP usage rebounds to $15.345B with 22 counterparties this afternoon vs. $0.227B Monday. Compares to last year's highest excess liquidity measure: $460.731B on June 30.

MNI PIPELINE: Corporate Bond Update: $6B Poland Priced, $3B ERAC Launched

• Date $MM Issuer (Priced *, Launch #)
• 04/07 $6B *Republic of Poland $1B 5Y +65, $2.5B 10Y +105, $2.5B 30Y +130
• 04/07 $3B #ERAC USA Finance $750M +3Y +65, $1B 5Y +75, $1.25B 10Y +95

MNI BONDS: EGBs-GILTS CASH CLOSE: Pullback With US-Iran Deadline Looming

EGBs and Gilts sold off Tuesday as a US-set deadline for a deal to end/pause the conflict with Iran loomed.

• President Trump set the tone for the session, warning again that tonight (8pm ET, 1am London time Wednesday) would mark the deadline for Iran to reach an agreement, and escalating rhetoric in a social media post saying of Iran "A whole civilization will die tonight".
• Following that pronouncement, EGBs and Gilts reached session lows by mid-afternoon, with periphery spreads widening.
• As the cash close approached, New York Times and Wall Street Journal reports that Iran had stopped negotiations with the US saw EGBs and Bunds selling off, with periphery spreads widening; after the close, an Axios report pointing to a "glimmer of progress" in negotiations saw futures rebound but still lower on the day.
• Bunds underperformed Gilts, with both the UK and German curves bear flattening.
• Periphery/semi-core EGB spreads widened.
• The looming Iran deadline overnight will take centre-stage after hours; Wednesday brings final March PMI readings.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 10.4bps at 2.72%, 5-Yr is up 10.8bps at 2.816%, 10-Yr is up 9.2bps at 3.084%, and 30-Yr is up 6.7bps at 3.539%.
• UK: The 2-Yr yield is up 8.5bps at 4.408%, 5-Yr is up 7.6bps at 4.459%, 10-Yr is up 7.1bps at 4.904%, and 30-Yr is up 5.1bps at 5.513%.
• Italian BTP spread up 2.2bps at 88.2bps / French OAT up 1.3bps at 70.6bps 

MNI FOREX: Cycle Highs for AUDNZD Pre-RBNZ, NOKSEK Rallies 1.4%

• Markets have traded with a risk off tone on Tuesday, with higher energy prices and lower equities reflecting the heightened level of uncertainty as Trump’s Iran deal deadline looms. Overall, there has been very limited impact on the US dollar index which remains close to the 100 mark as we approach the APAC crossover.
• Antipodean FX divergence has translated into a steady ascent for AUDNZD in early April, and today’s 0.5% rally has seen the cross reach a fresh cycle high above 1.2150. This places the cross at the highest level since 2013, with resistance appearing scant until 1.2344, the 61.8% retracement of the 2011-2020 range.
• Relative NZD weakness comes ahead of the April RBNZ decision on Wednesday, where Governor Breman is likely to reiterate that given monetary policy lags, it is better for fiscal policy to respond to a supply shock. All analysts expect an unchanged decision on the OCR, at 2.25%.
• Higher core yields kept pressure on the likes of CHF and JPY on Tuesday, with EURCHF rising to within a few pips of recovery highs at 0.9267 and USDJPY briefly piercing the 160.00 handle once again. Technicals remain supportive of a test of 160.46, the recent cycle peak and bull trigger, while intervention risks remain an offsetting risk.
• Elsewhere, Scandinavian FX divergence has also been in full flow, with an impressive 1.4% rise for NOKSEK today. In the process, the cross has pierced key resistance at 0.9859 (Jan 15 high), a clear break of which would expose parity as the next topside target. NOK has benefitted from the terms of trade channel since the Iran war started, with a hawkish Norges Bank decision providing additional support in late-March.
• Aside from the RBNZ meeting, FOMC minutes of the March meeting are also scheduled on Wednesday.

WEDNESDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
08/04/2026	0500/1400		JP	Economy Watcher's Survey
08/04/2026	0600/0800	**	DE	Manufacturing Orders
08/04/2026	0645/0845	*	FR	Foreign Trade
08/04/2026	0700/0900	**	CH	Unemployment
08/04/2026	0730/0930	**	IT	S&P Global Final Italy Construction PMI
08/04/2026	0730/0930	**	DE	S&P Global Final Germany Construction PMI
08/04/2026	0730/0930	**	EU	S&P Global Final Eurozone Construction PMI
08/04/2026	0830/0930	**	GB	S&P Global/CIPS Construction PMI
08/04/2026	0900/1100	**	EU	EZ PPI
08/04/2026	0900/1100	**	EU	EZ Retail Sales
08/04/2026	1100/0700	**	US	MBA Weekly Applications Index
08/04/2026	1430/1030	**	US	US DOE Petroleum Supply
08/04/2026	1430/1030	**	US	DOE Weekly Crude Oil Stocks
08/04/2026	1700/1300	**	US	US Note 10 Year Treasury Auction Result
08/04/2026	1705/1305		US	San Francisco Fed's Mary Daly
08/04/2026	1800/1400	***	US	FOMC Minutes
08/04/2026	1835/1435		US	Fed Governor Chris Waller