MNI ASIA OPEN: Risk Sentiment Cautiously Improved

EXECUTIVE SUMMARY

• MNI POLITICAL RISK ANALYSIS – Peru Election Preview 
• MNI MIDEAST: Netanyahu-Negotiations Opened w/Lebanon
• MNI: CBs Can Hold But Hike Fast If Price Expectations Rise-IMF
• MNI US DATA: GDP Q4 Growth Trimmed Further, PDFP Still Tells A Stronger Story
• MNI US DATA: Feb PCE Data Points To Inflation Taking A Bite Out Of The Consumer

US

MNI: CBs Can Hold But Hike Fast If Price Expectations Rise-IMF

Central banks can hold interest rates to assess damage from the Iran war but must prepare to "step in firmly with rate hikes" if inflation expectations become unstable, IMF chief Kristalina Georgieva said Thursday. "For now, there is value in waiting and watching, with central banks stressing their commitment to price stability but otherwise staying on hold -- with a stronger bias to action if credibility is in question," she said in a curtain raiser speech for next week's meetings in Washington.

PERU

MNI POLITICAL RISK ANALYSIS – Peru Election Preview 

Peru holds its general election on 12 April in a contest that follows five years of political chaos in the aftermath of the 2021 vote. Voters will determine the next president and vice president, as well as all members of Congress (130 seats in the Chamber of Deputies, 60 in the Senate), following a return to a bicameral legislature. In this preview, we provide a background to the election race, an explainer of the electoral system and identities of the main presidential candidates, a chartpack of the latest opinion polling and predictions market odds, analysis of various post-election scenarios with assigned probabilities, a financial market and EM credit overview, and views from sell-side analysts.

NEWS

REUTERS: IDF PREPARED TO RESUME IRAN FIGHTING IF NEEDED: CHIEF OF STAFF

ISRAEL-LEBANON TALKS TO TAKE PLACE IN WASHINGTON: AXIOS

MNI MIDEAST: Netanyahu-Negotiations Opened w/Lebanon

Barak Ravid at Axios: "Prime Minister Benjamin Netanyahu: In light of Lebanon’s repeated requests to open direct negotiations with Israel, I instructed yesterday to begin direct negotiations with Lebanon as soon as possible. The negotiations will focus on disarming Hezbollah and establishing peaceful relations between Israel and Lebanon. Israel appreciates the Lebanese prime minister’s call today to demilitarize Beirut."

MNI NATO: Rutte Endorses Trump Criticism Of Euro Defence Spending Amid NATO Rupture

Speaking amid a major rift between US President Donald Trump and European NATO members, NATO Secretary General Mark Rutte says at an event hosted by the Reagan Institute that the US must play a "powerful and active role" in world affairs if "peace is going to have a chance." Rutte adds, "American leadership is absolutely essential if freedom is to be the rule and not the exception." In a nod to Trump's concerns over 'burden sharing' within the alliance, Rutte suggests that Western European countries have taken US leadership "for granted."

US TSYS

US TSYS: War Headlines Keep Markets on Edge

• Treasuries look to finish mixed, near middle of Thursday's range, curves twist steeper with midday support in bonds evaporating as middle east war headlines kept markets on edge. Sentiment improving after headlines reported ceasefire negotiations had at least opened up between Israel and Lebanon.
• The situation remains fluid and veracity of reports in question at times:
• Earlier, senior Iranian figures had claimed a ceasefire in Lebanon formed part of the deal with the US, and that if Israel's assault did not halt the US-Iran deal would be deemed moot and talks in Islamabad on Friday will not take place.
• On cue, sentiment tempered after Israel's Netanyahu said "we wont stop until Northern Israel is secure" .. followed by: "there is no ceasefire in Lebanon."
• TYM6 trades steady at 111-07.5 (111-00.5 low / 111-15.5 high). Attention on important resistance at 111-21, the 50-day EMA. A clear break of this average is required to signal scope for a stronger recovery. This would open 111-31, a Fibonacci retracement. Moving average studies are in a bear-mode position, highlighting a dominant downtrend. First key support to watch is 110-16, the Apr 2 low. A break would be bearish.
• On data: Initial jobless claims jumped by more than expected in the week ending April 4, to 219k from 203k prior (rev from 202k) versus the 210k consensus. Real GDP growth was surprisingly revised down a little further in the third Q4 update to just 0.48% annualized (cons 0.7) after a more material trimming to 0.65% in the second update from 1.42% in the advance. Personal income fell by 0.07% M/M, the first contraction since last May and surprising the consensus for 0.3% growth.
• LOOK AHEAD: Friday Data Calendar: CPI, UofM Sentiment, Durables/Cap Goods

OVERNIGHT DATA

MNI US DATA: Continuing Claims Continue Downtrend, Initial's Improvement Stalls

Initial jobless claims jumped by more than expected in the week ending April 4, to 219k from 203k prior (rev from 202k) versus the 210k consensus. This meant that the 4-week moving average ticked up for the first time since the start of February (210k from 208k), which bears some watching, though the level remains very much consistent with a "low firing" environment. 

• Continuing claims for the prior week were, conversely, unexpectedly strong: they dropped to 1,794k from 1,832k prior (rev from 1,841k), well below the 1,828k consensus. For continuing claims, this marked the lowest 4-week moving average since June 2024 (1,823k), and overall levels are consistent with those seen in 2023-2024 having apparently reversed the approach to 2,000k in 2025.

MNI US DATA: GDP Q4 Growth Trimmed Further, PDFP Still Tells A Stronger Story

Real GDP growth was surprisingly revised down a little further in the third Q4 update to just 0.48% annualized (cons 0.7) after a more material trimming to 0.65% in the second update from 1.42% in the advance. Latest revisions were driven by changes in inventories (-0.14pp), with it now seen adding 0.14pp for a smaller uplift after -0.12pp in Q3.

MNI US DATA: Feb PCE Data Points To Inflation Taking A Bite Out Of The Consumer

February's personal income/outlays report showed an unexpected (but anomalous) drop in income, but there should be relatively more concern over largely-in-line spending growth, which is showing increasing signs of stalling - especially in real terms. Solid-enough wage growth and tax relief look like they will continue to underpin consumer spending, but the sizeable bite taken out of purchasing power from rising inflation continues to weigh on PCE's contribution to real GDP.

• Personal income fell by 0.07% M/M, the first contraction since last May and surprising the consensus for 0.3% growth. But employee compensation, the bulk of income, remained decent if a little slower (+0.2% after 0.4%, with a 3-month/3-month annualized rate of 3.9% the slowest since Aug 2025). Overall though, income was dragged down by a $34.4B drop in "other" government social benefits, which was in turn the result of lower Affordable Care Act enrollments (for which households receive tax credits). The BEA also notes that personal dividend income fell $39.7B; between those two volatile/one-off categories, the $33B increase in employee compensation was more than offset.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA up 275.88 points (0.58%) at 48185.8
S&P E-Mini Future up 39.25 points (0.58%) at 6860.25
Nasdaq up 187.4 points (0.8%) at 22822.42
US 10-Yr yield is down 0.6 bps at 4.2852%
US Jun 10-Yr futures are up 1/32 at 111-8.5
EURUSD up 0.0037 (0.32%) at 1.17
USDJPY up 0.53 (0.33%) at 159.1
WTI Crude Oil (front-month) up $4.9 (5.19%) at $99.34
Gold is up $50.94 (1.08%) at $4769.44

European bourses closing levels:
EuroStoxx 50 down 17.08 points (-0.29%) at 5896.29
FTSE 100 down 5.4 points (-0.05%) at 10603.48
German DAX down 273.64 points (-1.14%) at 23806.99
French CAC 40 down 18.07 points (-0.22%) at 8245.8

US TREASURY FUTURES CLOSE

Curve update:
3M10Y +0.243, 60.168 (L: 57.262 / H: 63.759)
2Y10Y +0.462, 50.405 (L: 49.152 / H: 52.319)
2Y30Y +1.966, 111.054 (L: 108.39 / H: 112.553)
5Y30Y +2.486, 98.207 (L: 95.62 / H: 99.094)
Current futures levels:
Jun 2-Yr futures up 0.625/32 at 103-24.125 (L: 103-23 / H: 103-26.625)
Jun 5-Yr futures up 1.5/32 at 108-10 (L: 108-05.25 / H: 108-14.5)
Jun 10-Yr futures up 1.5/32 at 111-9 (L: 111-00.5 / H: 111-15.5)
Jun 30-Yr futures up 1/32 at 114-7 (L: 113-23 / H: 114-20)
Jun Ultra futures down 3/32 at 116-22 (L: 116-07 / H: 117-07)

MNI US 10YR FUTURE TECHS: (M6) Corrective Cycle Still In Play

• RES 4: 112-16   61.8% retracement of the Mar 2 - 27 bear leg
• RES 3: 112-07   High Mar 18
• RES 2: 111-31   50.0% retracement of the Mar 2 - 27 bear leg
• RES 1: 111-20+ 50-day EMA & High Apr 08
• PRICE:‌‌ 111-14 @ 17:29 BST Apr 9
• SUP 1: 111-04+ 20-day EMA
• SUP 2: 110-16/109-24   Low Apr 2 / Low Mar 27 and the bear trigger
• SUP 3: 109-22+ 1.764 proj of the Mar 10 - 13 - 18 price swing
• SUP 4: 109-12   2.000 proj of the Mar 10 - 13 - 18 price swing

Gains in Treasuries across both Wednesday and Thursday trade still appear corrective. Attention is on the next important resistance at 111-21, the 50-day EMA. A clear break of this average is required to signal scope for a stronger recovery. This would open 111-31, a Fibonacci retracement. Moving average studies are in a bear-mode position, highlighting a dominant downtrend. First key support to watch is 110-16, the Apr 2 low. A break would be bearish.     

SOFR FUTURES CLOSE

Current White pack (Jun 26-Mar 27):
Jun 26 +0.010 at 96.330
Sep 26 +0.015 at 96.340
Dec 26 +0.015 at 96.385
Mar 27 +0.020 at 96.420
Red Pack (Jun 27-Mar 28) steady to +0.015
Green Pack (Jun 28-Mar 29) +0.005
Blue Pack (Jun 29-Mar 30) +0.005
Gold Pack (Jun 30-Mar 31) steady to +0.005

REFERENCE RATES
​​​​​​​
US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 3.59% (-0.03), volume: $3.169T
• Broad General Collateral Rate (BGCR): 3.58% (-0.03), volume: $1.314T
• Tri-Party General Collateral Rate (TCR): 3.58% (-0.03), volume: $1.286T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 3.64% (+0.00), volume: $106B
• Daily Overnight Bank Funding Rate: 3.63% (+0.00), volume: $223B

FED Reverse Repo Operation

RRP usage at $0.402B with 4 counterparties this afternoon vs. $0.177B Wednesday. Compares to last year's highest excess liquidity measure: $460.731B on June 30.

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

• Date $MM Issuer (Priced *, Launch #)
• 04/09 $3B *Province of Ontario 5Y SOFR+48
• 04/09 $1.25B #Democratic Republic of the Congo (DRC) $600M 5Y 8.75%, $650M 10Y 9.5%
• 04/09 $1B #Deutsche Bank 6NC5 +145a

MNI BONDS: EGBs-GILTS CASH CLOSE: Intraday Recovery As Ceasefire Proves Shaky

EGBs and Gilts recovered from sizeable intraday losses to close only moderately weaker Thursday.

• Gilts and EGBs weakened in early trade with oil firmer, as the stability of the 2-week ceasefire in the MidEast war was called into question following Israeli attacks on Lebanon overnight. 10Y yields rose as far as 3.032% in Germany (+8bp on the day), and 4.831% in the UK (+11bp).
• Global FI saw a reprieve (alongside equities) as oil pulled back toward the European cash close, after talks between Israel and Lebanon were announced - thereby removing a key obstacle to ceasefire ahead of the Iran-US/Israel negotiations due to start this weekend.
• The short-end of curves outperformed. OIS-implied Eurozone rates dipped after MNI published a piece citing ECB sources that pointed to reduced urgency for a rate hike in April given the ceasefire (see MNI SOURCES: Ceasefire Reduces Urgency Of ECB Hike Talk).
• The UK and German curves bear steepened, with Gilts slightly outperforming Bunds.
• In a light European data schedule, German February industrial production was weaker than expected, though January's was revised up.
• Friday's agenda includes Italian industrial production and German final March inflation, though most attention will be on the US CPI release.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 2.8bps at 2.519%, 5-Yr is up 3.5bps at 2.67%, 10-Yr is up 4.4bps at 2.988%, and 30-Yr is up 5.9bps at 3.524%.
• UK: The 2-Yr yield is up 0.9bps at 4.18%, 5-Yr is up 2.8bps at 4.284%, 10-Yr is up 3.8bps at 4.749%, and 30-Yr is up 4.7bps at 5.401%.
• Italian BTP spread down 1.3bps at 74.9bps / French OAT down 1.1bps at 62.6bps

MNI FOREX: Risk Optimism/USD Weakness on Israel/Lebanon Negotiations

• Today’s FX session has been characterised by dollar weakness. Although gradual at first, the moves started to accelerate in late session as Israel PM Netanyahu announced he has instructed his cabinet to open direct negotiations with Lebanon at the earliest possible time.
• The news put the top in crude futures and has assisted a fresh wave of equity strength, with the major benchmarks extending fresh post-ceasefire highs. While the dollar index is exhibiting 0.45% losses on the session, the DXY remains shy of yesterday’s lows, located at 98.53.
• High beta currencies within the G10 are rallying well, with the likes of NOK, AUD and NZD outperforming, while EUR and GBP are posting 0.4% advances against the greenback. Emerging markets continue to be well supported, with USDMXN sinking to 17.35 as the peso extends its impressive rebound. The pair has narrowed the gap back to prior cycle lows around 17.10 substantially.
• Combined with the positive equity senitment, the more contained retracement for fixed income markets reflects the concerns regarding the inflationary shock, all contributing to relative pressure on the Japanese yen on Thursday, which underperforms its G10 peers. EURJPY has rallied 0.6% today, taking the cross back above the 186.00 mark with this week’s climb highlighting a bullish reversal and a recent false break of a bull channel support drawn from the Feb 28 ‘25 low.
• 186.36 is the next level on the topside (the Feb 9 high), before 186.87, the Jan 23 high and a key medium-term resistance. Meanwhile, EURUSD has pressed back above 1.17, with price action strengthening a short-term bullish theme and signalling scope for an extension to 1.1746, a Fibonacci retracement.
• All focus turns to Friday’s release of US CPI. Other scheduled releases include China CPI/PPI, Canada employment and prelim readings of UMich sentiment and inflation expectations.

FRIDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
10/04/2026	0600/0800	**	SE	Private Sector Production m/m
10/04/2026	0600/0800	***	NO	CPI Norway
10/04/2026	0600/0800	***	DE	Germany CPI (f)
10/04/2026	0600/0800	***	DE	Germany CPI (f)
10/04/2026	0800/1000	*	IT	Industrial Production
10/04/2026	1000/1200		EU	ECB de Guindos Remarks at Development Event
10/04/2026	-	***	CN	New Loans
10/04/2026	-	***	CN	Money Supply
10/04/2026	-	***	CN	Social Financing
10/04/2026	1200/0800	**	BR	Brazil Final CPI
10/04/2026	1230/0830	***	US	CPI
10/04/2026	1230/0830	***	US	CPI
10/04/2026	1230/0830	***	US	CPI
10/04/2026	1230/0830	***	US	CPI
10/04/2026	1230/0830	***	CA	Labour Force Survey
10/04/2026	1230/0830	***	CA	Labour Force Survey
10/04/2026	1400/1000	***	US	UMich Surveys of Consumers
10/04/2026	1400/1000	***	US	UMich Surveys of Consumers
10/04/2026	1400/1000	**	US	Factory New Orders
10/04/2026	1400/1000	**	US	Factory New Orders
10/04/2026	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly
10/04/2026	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly
10/04/2026	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly
10/04/2026	1800/1400	**	US	Treasury Budget