US STOCKS: Strong Rebound for DJIA While SPX Eminis Mark New Record Highs

• RES 4: 161.95 High Jul 3 ‘24 and a major resistance
• RES 3: 161.46 1.618 proj of the Jan 27 - Feb  - 12 price swing
• RES 2: 160.79 1.500 proj of the Jan 27 - Feb  - 12 price swing
• RES 1: 160.46 High Mar 30
• PRICE: 159.14 @ 17:13 GMT Mar 31  
• SUP 1: 158.63 20-day EMA 
• SUP 2: 157.37 50-day EMA 
• SUP 3: 156.46 Low Mar 5 
• SUP 4: 155.85 Low Mar 2 

The trend needle in USDJPY continues to point north and the pair is trading closer to its recent highs. The breach of the 160.00 handle strengthens the bullish condition. Note that moving average studies remain in a bull-mode position, highlighting a dominant medium-term uptrend. Sights are on 160.79 next, a Fibonacci projection. Initial firm support lies at 157.37, the 50-day EMA.

• US Data/Speaker Calendar (prior, estimate). All times ET
• 04/01 0700 MBA Mortgage Applications (-10.5%, --)
• 04/01 0815 ADP (63k, 40k)
• 04/01 0905 StL Fed Musalem on economy / monetary policy
• 04/01 0910 Fed Gov Barr on AI and consumer issues
• 04/01 0945 S&P Global US Mfg PMI March final (52.4, 52.4)
• 04/01 1000 ISM Mfg (52.4, 52.3), Prices Paid (70.5, 73.8)
• 04/01 1000 Supreme court hears oral arguments on birthright citizenship
• 04/01 1130 US Tsy $69B 17W bill auction
• Source: Bloomberg Finance L.P. / MNI

European yields fell Tuesday, with periphery EGBs outperforming in a risk-on session.

• An overnight Wall Street Journal report that the US was prepared to end the war with Iran even if the Hormuz Strait remained closed was met with positivity in the bond and equity spaces as it appeared to augur a near-term conclusion to the conflict.
• Various related headlines buffeted EGBs and Gilts throughout the session, with an up-leg in futures coming after the cash close on headlines that the Iranian President was willing to end the war but wanted guarantees (the move held despite the "news" being debunked as a stale development).
• ECB's Muller (typically hawkish) suggested an April hike may be needed; Panetta (usually dovish) warned on wage-price spiral risks.
• On the day, the German curve bull flattened, with the UK's bull steepening. BTPs and GGBs outperformed across the space, with 10Y spreads tightening by 4+ basis points vs Bunds.
• In data, Italian, Dutch and Eurozone flash March inflation were softer than expected, with French closely in line. UK GDP was not a market-mover.
• Some attention will be on final PMI prints Wednesday.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.5bps at 2.616%, 5-Yr is down 2.3bps at 2.727%, 10-Yr is down 3.1bps at 3.004%, and 30-Yr is down 4.6bps at 3.457%.
• UK: The 2-Yr yield is down 4.6bps at 4.406%, 5-Yr is down 3.7bps at 4.465%, 10-Yr is down 1.9bps at 4.916%, and 30-Yr is down 2.1bps at 5.522%.
• Italian BTP spread down 4.7bps at 90.3bps / Greek down 4.2bps at 84.9bps