RUSSIA: Russian Delegation to Make Statement for Media Shortly, TASS Report

The PDMA has announced it will look to sell E200mln of the 3.875% Mar-29 GGB (ISIN: GR0124035693) at auction tomorrow.

Import prices were notably softer than expected in March along with downward revisions to February, although firm details for a specific airfare series could have boosted core PCE estimates a touch. Import inflation should see a boost ahead from recent dollar weakness but the fit is clearly not great. 

• Overall import prices fell -0.1% M/M (cons 0.0%) in March after a downward revised 0.2% (initial 0.4%) in February.
• For a better idea of underlying price pressures, imports ex petroleum prices saw a larger miss with 0.0% M/M (cons 0.3) after 0.1% (initial 0.4%).
• It saw ex-petroleum import price inflation ease two tenths to 1.6% Y/Y for its lowest since August via recent highs of 2.3% Y/Y in Oct and Dec. 

• Within the details, air passenger fares increased 0.6% M/M in NSA terms, between 2024 and 2023 values but higher than most readings in prior years. Morgan Stanley see this as 1% M/M in seasonally adjusted terms vs -4.5% M/M expected and have nudged their core PCE estimate from 0.08% M/M (in line with other analysts) a touch to 0.10% M/M. 

  

Swap spreads widen as Deputy Treasury Secretary Faulkender notes that “conversations are being had on the SLR”, with the Tsy investigating how binding the SLR is in times of stress.

• An SLR tweak has been touted in recent months but the combination of suppressed levels of swap spreads (following last week’s sell off) and communication pointing to discussions on the matter being underway, as opposed to pure speculation surrounding the idea, drive today’s move
• Fed Governor and nominee for Vice Chair of Supervision Bowman has previously touted the potential for SLR reform.
• Spreads last 0.4-2.2bp wider, with the 7- to 10-Year zone outperforming on the spread curve.
• TY futures also touch fresh session highs on the move, before fading.