BA/ML strategists Ralf Preusser....>

US TSYS/RESEARCH: BA/ML strategists Ralf Preusser and Shyam Rajan eyed "trigger

points" as "with the global bond market around key levels, the near term

triggers remain the choice of the Fed chair, the ECB's tapering decision and the

US Senate's budget vote." 

- They add "with global bond markets largely respecting key levels (2.4% on 10y

UST, 1.4% on Gilts, 50bp on Bunds), the conversation moves to the next possible

triggers. Here, from a monetary policy standpoint the focus remains on two key

aspects: The announcement of the next Fed chair - while market reactions thus

far treat Powell as dovish and Warsh as hawkish, we suggest going against

consensus. As detailed in US front-end, a Powell chairmanship could raise Mar18

hike probabilities given the continuity (already a voting member) while a Warsh

Fed could throw the front-end of the curve out of whack given his desire to

reform Fed communication."