EXECUTIVE SUMMARY
NEWS
MNI BRIEF: BOC Says Recession Is Possible In Deep Trade War
Bank of Canada Governor Tiff Macklem said Thursday an intense tariff war makes a recession possible but there's a wide range of scenarios, some of his most candid comments to date about the strongest tensions between two of the world's largest trade partners since the 1930s. “If you get broad based tariffs for a long time, yes, that could very well lead to a recession,” he told reporters in Calgary, Alberta. There are more favorable situations where uncertainty is reduced or tariffs removed and “I don’t think we’ll have a recession in that scenario” he said.
MNI GERMANY: Bundesrat Set To Sign Off On Debt Brake Reform Tomorrow
The Bundesrat (Federal Council), sometimes described as the upper house of the German parliament, is set to vote on the reform to the constitutional debt brake and formation of an E500B infrastructure fund tomorrow (21 March). The reforms were passed by the required two-thirds majority in the Bundestag earlier this week and will require the same majority in the Bundesrat.
MNI US-RUSSIA: Russia's Shoigu Confirms US Invited To Security Conference
Sergei Shoigu, Secretary of Russian Security Council and former defence minister, has confirmed to state-run TASS that the United States will be invited to attend an international security conference in Moscow running 27-29 May. Shoigu claims "representatives from more than 100 countries have already confirmed their participation in the upcoming meeting". Shoigu's comments come as another overture towards the United States as both sides seek to display improving bilateral relations following the call between Presidents Vladimir Putin and Donald Trump earlier this week.
MNI EUROPEAN COUNCIL: 26 Ldrs Back Statement On Ukraine Territorial Integrity
EU leaders are meeting in Brussels currently, with the levels of support the Union can afford to give to Ukraine (both in the financial and political sense), and the EU's plans to bolster its own defence and defence industry the main subjects of discussion. So far there has been little in the way of concrete progress on either front. Conclusions will not be published until the end of the meeting and there is the likelihood of talks dragging late into the night on Thursday and into Friday.
MNI US TSYS: Firmer/Near Lows, Curves Manage to Bull Steepen off Lows
OVERNIGHHT DATA
MNI US DATA: Jobless Claims Tick Up, But Little Evidence Of Soaring Gov't Layoffs
Initial jobless claims came in at 223k in the Mar 15 week - which is the reference period for March's nonfarm payrolls report - basically matching the 224k expected (221k prior was rev from 220k). Continuing claims registered 1,892k in the Mar 8 week, a touch softer vs the 1,887k expected though more than offset by a downward revision to the prior week (1,859k prior k rev from 1,870k).
MNI US DATA: Existing Home Sales Pick Up In February, But Still At Depressed Levels
Existing home sales were much stronger than expected in February, rising to 4.26mln on a seasonally-adjusted annual basis from 4.09mln in January - versus expectations of a decline to 3.95mln. That was a little above the 4.09mln 2-year average, though within the ranges of the last 6 months. The underlying data showed a more mixed picture. Sales were driven by a 4.4% M/M rise in the South and a 13.3% rise in the West (both rebounding strongly from a weak January), while Northeast activity continued to sag (-2% M/M) and those in the Midwest flat. Inventory remained low but still higher than recent lows (3.5 months of sales for a 2nd consecutive month, up from 3.2 in December). Median prices (which are not seasonally adjusted) were $398.4k, up 3.8% Y/Y, but the slowest pace in 5 months.
MNI US DATA: Philly Fed Manufacturing Continues To Retrench As Prices Paid Soar
The Philadelphia Fed's Manufacturing Business Outlook Survey General Business Conditions index fell 5.6 points to 12.5 (9.0 expected, 18.1 prior), pulling back for a second month after soaring to start the year. Expectations for 6 months ahead fell 22.2 points to a 14-month low 5.6 - compared to 53.9 in November. Both readings suggest that optimism following last November's election has more than reversed amid tariff imposition and uncertainty, with activity looking increasingly weak even as price pressures are mounting.
MNI CANADA DATA: Small Business Confidence Craters On US Trade War Concerns
The Canadian Federation of Independent Business (CFIB) Business Barometer fell to 25.0 in March from 49.8 prior (rev from 49.5), suggesting by far the weakest small business confidence in a series that goes back to 2000. Unsurprisingly, with a survey conducted between March 5-7 as the US-Canada trade war flared, the report noted "Tariffs, counter-tariffs and threats of additional tariffs are taking a significant toll on business optimism".
MARKETS SNAPSHOT
Key market levels of markets in late NY trade:
DJIA down 34.32 points (-0.08%) at 41931.6
S&P E-Mini Future down 20.5 points (-0.36%) at 5710.5
Nasdaq down 87.7 points (-0.5%) at 17665.37
US 10-Yr yield is down 1.4 bps at 4.2293%
US Jun 10-Yr futures are up 5.5/32 at 111-5.5
EURUSD down 0.0051 (-0.47%) at 1.0852
USDJPY up 0.09 (0.06%) at 148.78
WTI Crude Oil (front-month) up $1.1 (1.64%) at $68.26
Gold is down $2.2 (-0.07%) at $3045.52
European bourses closing levels:
EuroStoxx 50 down 56.43 points (-1.02%) at 5450.93
FTSE 100 down 4.67 points (-0.05%) at 8701.99
German DAX down 288.91 points (-1.24%) at 22999.15
French CAC 40 down 77.27 points (-0.95%) at 8094.2
US TREASURY FUTURES CLOSE
3M10Y -0.711, -6.889 (L: -12.415 / H: -5.168)
2Y10Y +1.201, 27.425 (L: 24.072 / H: 27.788)
2Y30Y +2.549, 59.762 (L: 54.535 / H: 59.933)
5Y30Y +1.935, 54.767 (L: 50.998 / H: 54.811)
Current futures levels:
Jun 2-Yr futures up 1.625/32 at 103-17.25 (L: 103-14.75 / H: 103-19.375)
Jun 5-Yr futures up 3.25/32 at 108-0.75 (L: 107-28.25 / H: 108-08)
Jun 10-Yr futures up 6/32 at 111-6 (L: 111-00.5 / H: 111-17.5)
Jun 30-Yr futures up 9/32 at 117-25 (L: 117-19 / H: 118-23)
Jun Ultra futures up 9/32 at 123-13 (L: 123-07 / H: 124-23)
MNI US 10YR FUTURE TECHS: (M5) Trend Needle Points North
The trend condition in Treasury futures is bullish and the recent sideways price action appears to be a pause in the uptrend. Moving average studies are in a bull-mode condition and this reinforces a bullish theme. Recent gains have resulted in a print above 111-22+, the Dec 3 ‘24 high. A clear breach of this level would open 112-02 and 112-13, Fibonacci projections. Firm support is at 110-00, Feb 7 high.
SOFR FUTURES CLOSE
Mar 25 +0.003 at 95.690
Jun 25 +0.030 at 95.910
Sep 25 +0.040 at 96.155
Dec 25 +0.040 at 96.335
Red Pack (Mar 26-Dec 26) +0.030 to +0.040
Green Pack (Mar 27-Dec 27) +0.025 to +0.030
Blue Pack (Mar 28-Dec 28) +0.030 to +0.035
Gold Pack (Mar 29-Dec 29) +0.035 to +0.040
SOFR FIXES AND PRIOR SESSION REFERENCE RATES
SOFR Benchmark Settlements:
US TSYS: Repo Reference Rates
STIR: FRBNY EFFR for prior session:
FED Reverse Repo Operation
RRP usage recedes slightly to $192.640B this afternoon from $193.378B Wednesday. Compares to $58.770B (lowest level since mid-April 2021) on February 14. The number of counterparties steady at 47.
MNI PIPELINE: Corporate Bond Update: $2.25B Citigroup Launched
MNI BONDS: EGBs-GILTS CASH CLOSE: Gilts Underperform Bunds As BoE Vote Leans Hawkish
Gilts underperformed Bunds Thursday, with periphery EGB spreads widening.
Closing Yields / 10-Yr EGB Spreads To Germany
MNI FOREX: AUD and NZD Consolidate Significant Losses, EURUSD Extends Pullback
FRIDAY DATA CALENDAR
Date | GMT/Local | Impact | Country | Event |
21/03/2025 | 0700/0700 | *** | ![]() | Public Sector Finances |
21/03/2025 | 0745/0845 | ** | ![]() | Manufacturing Sentiment |
21/03/2025 | 0900/1000 | ** | ![]() | EZ Current Account |
21/03/2025 | 1100/1100 | ** | ![]() | CBI Industrial Trends |
21/03/2025 | 1230/0830 | ** | ![]() | Retail Trade |
21/03/2025 | 1305/0905 | ![]() | New York Fed's John Williams | |
21/03/2025 | 1500/1600 | ** | ![]() | Consumer Confidence Indicator (p) |
21/03/2025 | 1700/1300 | ** | ![]() | Baker Hughes Rig Count Overview - Weekly |
21/03/2025 | 1700/1300 | ** | ![]() | Baker Hughes Rig Count Overview - Weekly |