Core Futures Unwind Retail Sales Gains

Core global FI markets have unwound the bid related to softer-than expected U.S. retail sales data.

• TY futures sit roughly in line with pre-data levels, while Bund & gilt equivalents are below pre-data prints.
• Major technical parameters remain untouched, outside of this morning’s shallow move above the 20-DMA in gilt futures.
• Markets have sided with our view noted in the wake of the U.S. data, when we noted “we wouldn't read too closely into these figures: it's possible that unusually poor weather in January may have negatively impacted some categories unduly, even considering the relevant seasonal adjustment.”
• Technical recessions in both the UK & Japan, as well as softer-than-expected Australian labour market data provided support in Asia/early London hours.
• Comments from ECB’s Lagarde, BoE’s Mann & Greene & UK fiscal discussions failed to meaningfully move the needle.
• The totality of today’s macro data leaves major central bank STIR pricing little changed to a touch more dovish on the day, with end ’24 cuts priced as follows:
• Fed: -99bp
• ECB: -114bp
• BoE: -78bp