US-JAPAN: Nippon Steel Pres.-Our Position On US Steel Acquisition Unchanged

Year-end Fed funds implied rates are ~3bps more dovish than yesterday’s close, with 105bps of easing now priced through the December meeting (vs ~102bps yesterday; vs an assumed 4.33% effective). Pricing for upcoming meetings is steadier, with 14bps of cuts priced through May, 39bps through June and 63bps through July.

• Although Fed Chair Powell said on last Friday that FOMC is “well positioned to wait for greater clarity before considering any adjustments to our policy stance”, the impact of the US tariff announcement on markets (e.g. tighter/stressed Treasury market conditions) and economic activity may yet prompt a more dovish stance in upcoming meetings than previously signalled.
• The SOFR strip has twist steepened, with whites +2.0 to +4.0 ticks and blues -5.5 to -6.0 ticks. The long-end has been dragged lower by US Treasuries (details of which were highlighted in an earlier post).
• Fed’s Barkin is scheduled to speak at 1600GMT/1100EST, with the FOMC’s March meeting minutes set to follow at 1900GMT/1400EST (although these minutes are largely stale given the latest developments in US trade policies and the associated market fallout).

• SX5E (20th June) 3500/2500ps 1x2, bought for 14.5 in 5k.

The last time the index traded at these ~3000.00 levels was back in October 2020.

(MNI) London - State-run Xinhua reports excerpts from a white paper from the State Council Information Office regarding US trade and economic relations. The report claims that "in recent years, the rise of US unilateralism and protectionism has seriously interfered with the normal economic and trade cooperation between China and the United States."

• In response to US tariffs, "China has no choice but to take strong countermeasures to resolutely defend its national interests. At the same time, China has always adhered to the basic position of resolving disputes through dialogue and consultation,"
• Xinhua: "These restrictive measures, which use tariffs as threats and coercion, are a mistake on top of a mistake, and once again expose the typical unilateralism and bullying nature of the United States. They not only violate the laws of the market economy, but also run counter to multilateralism,"
• Xinhua: "It is hoped that the United States and China will meet each other halfway, follow the direction indicated by the call between the two heads of state, and in the spirit of mutual respect, peaceful coexistence and win-win cooperation"
• Earlier, Foreign Ministry spox Lin Jian said on the emerging trade war that "China will take necessary measures to resolutely safeguard its lawful rights and interests. If the United States ignores the interests of the two countries and the international community and insists on fighting tariff wars and trade wars, China will surely fight till the end,"