OIL PRODUCTS: Oil Products Summary at European Close: Cracks Slip

• Both appear to be buys:
• 7,000 TUM5 103-16.5, through 103-15.38 post time offer at 1400:13ET, trades 103-13.5 last (-16.5)
• 5,000 FVM5 107-25.75, post time offer at 1356:20ET, trades 107-16.25 last (-1-00.75)

Is the EU part of the 10% / 90 day pause club? There is a lot of ambiguity in the announcement and Tsy Sec Bessent failed to clarify this (and also added to the confusion with MX and CA, see below). Having announced retaliation vs the US today, the EU could be considered excluded - however unlike China's retaliatory moves which are in place, the EU's retaliatory tariffs only go into effect April 15.

•  And it seems that the main thrust of the announcement is to isolate China.
• So at the moment we (and the markets) are operating under the assumption that the EU is in the 10% / 90 day negotiation window though we await an official announcement.
• Re Mexico and Canada, per BBG's Canada reporter on X.com, @btaplatt: "It's going to take a bit to get clarity on whether any of this affects Canada. In theory it shouldn't, as Canada wasn't included in the reciprocal tariff order. Scott Bessent said yes when asked if Canada/Mexico are at 10% but, uh...we'll have to see whether he misspoke."

• Treasury futures remain near session lows, little react to release of FOMC minutes that note risks to increased inflation and elevated policy uncertainty.
• Focus remains squarely on Pres Trump tweet upping China tariff to 125% while granting 90 day pause for 75 other countries while lowering to reciprocal tariff level to 10%.
• Most notable for Tsys is the swing in curves - from new 3 year highs overnight (2s10s tapped 73.847) to -14.830 flatter at 41.283 at the moment.
• Projected rate hike pricing retreats: current levels vs. this morning  (*) as follows: May'25 at -5.3bp (-11.8bp), Jun'25 at -19.1bp (-34.8bp), Jul'25 at -34.9bp (-58.4bp), Sep'25 -50.2bp (-76.2bp). Year end projection of 75bp total rate cut vs. full point this morning.