US DATA: Strength In Factory Orders Reinforces Solid Pre-Tariff Narrative
Apr-02 14:20
New orders for manufactured goods ("factory orders") were a little stronger than expected in February, with the headline reading of 0.6% M/M (0.5% expected, 1.8% prior upwardly revised from 1.7%). The 3M/3M annualized rate of orders growth picked up to 1.6%, implying improved momentum after 2 consecutive negative monthly readings.
- Durable goods were minimally revised in the final reading: headline orders were upped 0.1pp to 1.0% M/M, but orders ex-transport (0.7%), and core capital goods orders (-0.2%) and shipments (0.8%) were all unrevised.
- As we noted following the durable goods report - in which orders greatly exceeded expectations - manufacturing data for February was suggestive of strong "hard" data for manufacturing in Q1. The factory orders data further supports this narrative.
- Incoming data since then - including a very weak ISM Manufacturing report for March - further supports the other part of the narrative however, which is that recent manufacturing strength reflects front-running the impact of tariffs, implying a dropoff in demand later in the year that may already be reflected by slowing core capital goods orders in February.
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FED FUNDS FUTURES: BLOCK, More April'25 FF Buying
Mar-03 14:18
Second cross of 6,000 FFJ5 95.685 (-0.005), latest vs. post time offer at 0915:15ET
PIPELINE: Corporate Bond Roundup: Early March Issuance Surge
Mar-03 14:13
- Date $MM Issuer (Priced *, Launch #)
- 03/03 $3B KFW WNG 2028 +31a
- 03/03 $1B Alumina PtyLtd 5NC2, 7.5NC3
- 03/03 $Benchmark Synopsys 2Y +80a, 3Y +90a, 5Y +105a, 7Y +115a, 10Y +125a, 30Y +150a
- 03/03 $Benchmark Sumitomo Mitsui 3Y +85a, 5Y +100a, 5Y SOFR, 10Y +120a
- 03/03 $Benchmark America Honda 3Y +85a, 3Y SOFR, 5Y +100a, 10Y +120a
- 03/03 $Benchmark Duke Energy 2Y +60a, 10Y +110a, 30Y +130a
- 03/03 $Benchmark Columbia Pipelines 10Y +150a, 30Y +175a
- 03/03 $Benchmark PayPal 3Y +75a, 3Y SOFR, 10Y +115a
- 03/03 $Benchmark Virginia Electric 10Y +120a, 30Y +140a
- 03/03 $Benchmark Synchrony Financial 6NC5 +170a
- 03/03 $Benchmark Humana 10Y +165a, 30Y +187a
- 03/03 $Benchmark MPLX 10Y +155a, 30Y +185a
- 03/03 $Benchmark Tampa Electric 10Y +125a
- 03/03 $Benchmark Nucor 5Y +90a, 10Y +115a
- 03/03 $Benchmark CME Group 5Y +70a
EGBS: PGBs Outperform After One-Notch Upgrade & Positive Outlook At S&P
Mar-03 14:12
{PO} EGBS: PGBs remain the regional outperformer at the 10-Year point, with the bid in equities, German fiscal dynamics and S&P’s one-notch upgrade of Portugal after hours on Friday driving today’s spread move.
- 10-Year PGB/Bunds 3bp tighter on the day at ~50bp vs. cycle closing lows of 39.1bp, marginally outperforming BTPs & SPGBs.
- Portugal’s fiscal trajectory leaves PGBs trading comfortably through OATs and PGBs across the curve.
- S&P’s choice to leave Portugal on a “positive” outlook after the upgrade to A provides further tailwinds.
- In the report that accompanied the upgrade the rating agency noted that “despite a highly uncertain trade and geopolitical environment, Portugal's continual external deleveraging as a share of GDP and current account receipts enhances its external profile”.
- Ultimately, S&P expect “relatively smooth policy implementation by the government, geared toward fiscal prudence, despite a fragmented parliament.”
- Looking ahead, the bar to further upgrades doesn’t seem particularly high at this stage, with S&P noting that “we could raise the rating within the next 24 months if Portugal continues to pursue its fiscally prudent policies, resulting in further significant declines in government debt as a share of GDP, or continues to display persistent current account surpluses, demonstrating resilience to potential external uncertainties.”
