JGBS: Richer With Post-FOMC Rally In US Tsys, BoJ Minutes (Mar) Flag Caution

• In US trading overnight, gold fell for the third day straight.
• As markets remain uncertain, even gold’s safe haven bid has been challenged with bullion down -1.8% overnight to US$2,983.28.
• Despite reassurances from Trump officials to investors that the tariff plan won’t derail the economy, there remains little appetite for risk in most asset classes.
• Despite the reassurances, Trump then threated with upping the tariffs on China.
• With the arbitrage in pricing between the US and UK over, the flow of physical gold into London resumed in March with an increase for the first time in five months.
• Yesterday, in China’s FX Reserves release, the Central Bank provided details on the growth of gold held by the PBOC, as it rose for a fifth consecutive month. 

TYM5 is 111-27+, -0-06+ from closing levels in today's Asia-Pac session.

• Cash US tsys are dealing slightly mixed, with a steepening bias, in today’s Asia-Pac session.
• Markets experienced significant turbulence yesterday, with extreme volatility driven by poor liquidity conditions. The situation was further exacerbated by a flurry of social media activity from President Trump, who threatened an additional 50% tariff on Chinese imports.
• The US 10-year yield, which ranged between 3.85% and 3.95% during yesterday’s Asia-Pac session, moved sharply higher as European markets opened. It reached an intraday high of 4.21% before finishing at 4.18%, +19bps. It is currently trading at 4.1740%, 0.95bp lower.
• Economic data remains light ahead of key releases later this week. Markets are looking ahead to Wednesday's release of the March FOMC minutes, followed by CPI data on Thursday and PPI on Friday.

European natural gas prices fell early in the session but then trended higher. After falling to EUR 33.51 they reached a peak of EUR 38.62 before moderating to EUR 35.87 to be down 1.5%. The recovery was helped by EU President von der Leyen saying that the bloc will negotiate with the US on a trade deal.

• Tariffs on China’s imports from the US should help with Europe’s refilling over the summer, which has been a material concern, as cargoes are redirected. European storage was at around 34% full last week, below the 5-year seasonal average of 45%, according to Bloomberg, and it needs to be at 90% by November 1. Contract prices trend higher until October 2025, still discouraging refilling but the spread has narrowed significantly from earlier in the year.
• Unplanned outages remain a risk to markets. Norway’s Gassco has just announced 5.1mcm/d from today will be unexpectedly unavailable.
• Bloomberg notes that European gas is in oversold territory based on the 14-day RSI.
• US gas rose to a high of $4.03 before trending lower to finish down 5.6% to $3.73. Concerns that US tariffs and subsequent trade war will weigh on growth and thus energy demand have pressured prices and they are now down 12.5% in April.
• Forecasts by Vaisala for cooler weather across the eastern US and Great Lakes in mid-April as well as lower temperatures in the Pacific and Northwest regions could see an increase in power demand though.
• US lower-48 gas production rose 5.1% y/y on Monday and demand +10% y/y.