MNI US OPEN: Treasury Curve Inversion Persists

MNI: GERMANY FEB IMPORTS +6.4% M/M, JAN -4.0% M/M

FEB TRADE BALANCE SA 11.5BLN, JAN 8.9BLNr

FIXED INCOME: US curves most inverted for over a decade

Divergence between USTs, Bunds and gilts in the Asian session saw the UST curve sell-off with 2s10s which overnight reached a low of-9.5bp, the most inverted level since 2006. US 5s30s went even further, themost inverted since September 2000, hitting a low of 15.2bp overnight. Through the European session we have seen Bunds, Treauries and gilts all drift higher.

• Treasuries remain below Friday's close but gilts and Bunds have both surpassed this.
• The main event of the day will be a speech from BOE MPC member Cunliffe, in what are expected to be his first public remarks on monpol since voting to keep rates on hold at the March meeting.
• We also have US factory orders and the final print of durable goods.
• TY1 futures are down -0-5 today at 122-02+ with 10y UST yields up 0.8bp at 2.393% and 2y yields down -0.6bp at 2.453%.
• Bund futures are up 1.06 today at 159.41 with 10y Bund yields down -5.6bp at 0.497% and Schatz yields down -3.3bp at -0.109%.
• Gilt futures are up 0.73 today at 121.92 with 10y yields down -4.8bp at 1.559% and 2y yields unch at 1.365%.

German Trade Rebounds Above Forecasts

GERMANY FEB IMPORTS +6.4% M/M, JAN -4.0% M/M

GERMANY FEB EXPORTS +4.5% M/M, JAN -3.0% M/M

FEB TRADE BALANCE SA 11.5BLN

• Germany's trade data saw an upside surprise in February following a January slump caused by associated slowdown effects of the Omicron wave.
• Both export/import and trade balance prints beat consensus forecasts.
• Exports grew +6.4% m/m (+1.5% expected), almost 5pp above expectations and a solid 9.4pp rebound from January.
• Imports expanded by +4.5% m/m in February (+1.0% expected), which is up 8.5pp from January.
• The total trade balance for February came in at 11.5bln EUR, 1.5bln above the forecast.
• February saw substantial reductions in trade with Russia due to sanctions imposed at the end of the month, although the March print will highlight the total extent of sanctions on trade between the countries.

FOREX: EUR Extends Pullback From Important Resistance

• EUR is underperforming so far Monday, with EUR/USD extending the pullback off last week's highs at 1.1185. An important S/T resistance has now been defined here, marking the Mar 31 high.
• Newsflow surrounding Ukraine remains a key focus, with reports suggesting a further pullback of Russian forces from cities and territories in the west and northern parts of the country - most notably the areas surrounding Kyiv. Despite the de-escalation of military tensions in these areas, accusations of uncovered evidence of war crimes will add additional pressure on western leaders to tighten the sanctions grip on Russia. This keeps energy prices underpinned on the continent and is helping CAD and NOK holding close to recent highs.
• SEK, EUR and JPY are among the poorest performers so far today, while AUD< CAD and NOK trade well.
• Data focus turns to February US factory orders and the final read for durable goods orders. The speaker slate is similarly light, with just BoE's Cunliffe on the docket.

EQUITIES: Hang Seng Closes Higher; Cyclical Stocks Lag In Europe

• Asian markets closed higher: Japan's NIKKEI closed up 70.49 pts or +0.25% at 27736.47 and the TOPIX ended 9.36 pts higher or +0.48% at 1953.63. The HANG SENG ended 462.76 pts higher or +2.1% at 22502.31T
• European equities are mixed, with healthcare/consumer stocks leading and financials/industrials lagging: the German Dax down 25.06 pts or -0.17% at 14422.3, FTSE 100 up 2.34 pts or +0.03% at 7539.32, CAC 40 down 9.45 pts or -0.14% at 6674.27 and Euro Stoxx 50 up 0.66 pts or +0.02% at 3918.53.
• U.S. futures are flat, with the Dow Jones mini down 30 pts or -0.09% at 34688, S&P 500 mini up 1.25 pts or +0.03% at 4540.5, NASDAQ mini up 26.75 pts or +0.18% at 14890.5.

COMMODITIES: WTI Crude Recovers Early Losses To Trade Back At $100

• WTI Crude up $0.84 or +0.85% at $100.2
• Natural Gas up $0.02 or +0.28% at $5.736
• Gold spot up $4.44 or +0.23% at $1930.28
• Copper up $2.95 or +0.63% at $471.9
• Silver up $0.16 or +0.65% at $24.7895
• Platinum up $5.05 or +0.51% at $994.63