US TSYS: Risk-Off Buying Short End Rates, Crude Surges, Equities Sharp Retreat
Mar-27 19:38
- Treasuries look to finish steady in 10s to mixed, curves twisting broadly steeper with heavy buying in short end after 2Y Tsy yield topped 4% this morning - 2Y yld currently 3.9098% (-.0759).
- The negative correlation of crude to Treasury prices seeing some push back this morning. Treasuries moving off lows despite crude rising (WTI +5.12%), curves twisting steeper (2s10s +9.802 at 51.979; 5s30s +7.098 at 90.987).
- Short end Tsy bid spilled over to SOFR Whites to Reds (SFRH6-SFRZ7) currently +0.040 to +0.095. This in turn saw projected rate moves/hike pricing cool vs. late Thursday lvls (*): vs. la Apr'26 at +1bp (+1.6bp), Jun'26 at +2.1bp (+5bp), Jul'26 at +2.5bp (+7.1bp), Sep'26 at +5.8bp (+11.1bp), Oct'26 +7.3bp (+13.6bp).
- Late comments from ECB’s Schnabel on the GC having to be agile and vigilant but not needing to rush fuelled a paring of rate hike bets in the front-end. While it had little impact on the Euro, EURUSD has maintained the steady bearish bias over the second half of this week, edging back towards 1.15 ahead of the close.
- Richmond Fed Pres. Barkin's speech Friday, "Driving Through Economic Fog (Still)" (link), adds another call for caution on the near-term Fed policy direction due to significant uncertainty.
- UofM Consumer sentiment disappointed in the final March release as it was revised down to 53.3 (cons 54.0, flash 55.5) after 56.6 in February, albeit only to its lowest since December. 1Y inflation expectations were stronger than expected at 3.8% (cons 3.6, flash 3.4) in March after 3.4% in February to bounce from its lowest since Jan 2025. Flash U.Mich details had suggested readings of ~3.5% for those answering Mar 1-9.
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US STOCKS: Late Equities Roundup: IT Sector Outperforms Ahead Nvidia Earnings
Feb-25 19:30
- Stocks remain moderately higher late Wednesday, the tech heavy Nasdaq buoyed by Information Technology sector shares ahead Nvidia Corp and a slew of corporate earnings expected after today's close (includes APA Corp, Salesforce Inc, Paramount Skydance and Synopsys Inc).
- Optimism of positive forward guidance in the face of increased capital expenditures tied to AI has gained after Meta announced it's intent to use millions of Nvidia chips to for AI expansion efforts last week, and a "multiyear deal with AMD involves deploying up to 6 gigawatts of the company’s graphics processing units for artificial intelligence data centers" CNBC reported yesterday.
- Aside from Alphabet, Mag-7 companies are all up between 1.5-2.5% in the second half.
- On the flipside, trading desks cited a lack of housing regulation proposals from Pres Trump at the SOTU address for weaker home builder shares on the day.
- Elsewhere, Consumer Staples, Industrials and Energy sector shares underperformed.
US TSY FUTURES: BLOCK: Jun'26 30Y Ultra-Bond Sale
Feb-25 19:25
- -2,720 WNM6 120-14, sell through 120-16 post time bid at 1416:07ET, DV01 $500,000.
BOJ: Ueda Doesn't See Major Japan Impact From New Trump Tariffs: Yomiuri
Feb-25 19:18
BOJ Gov Ueda tells Yomiuri in an interview conducted on Feb 24 and published earlier today that: "Referring to the monetary policy meetings to be held in March and April regarding further interest rate hikes, he said, 'We would like to make a decision after carefully examining the information that will be available up until then.'"
- Ueda tells Yomiuri re rate hikes, "If the outlook for the economy and prices becomes more likely to be realized, our basic stance will be to adjust the level of monetary easing."
- Quoting the article, "the new tariffs imposed by the Trump administration on the 24th as a replacement for the 'reciprocal tariffs' will 'not have a major impact on Japan.'" (Quotes are translated using Google Translate.)
