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Risk Off Prompts Safe Haven Demand

STIR: It has been a relatively uneventful morning for STIR markets but there is
some divergence between markets this morning.
- German factory orders came in much weaker than expected this morning, falling
4.2% M/M or 8.4% Y/Y. Much of this weakness was driven by non-Eurozone orders
which fell 7.9% M/M or 11.6% Y/Y. This print has fuelled further concerns about
the outlook for the global economy.
- With Eurodollar futures having a higher beta than Euribor futures to economic
data, the largest moves were seen in the Eurodollar strip. Most of the strip
rose by 2-2.5 ticks on the day. The US calendar is fairly light today with
claims and speeches from the Fed's Mester and Harker the highlights. However,
all eyes are looking ahead to tomorrow's employment report, particularly
following yesterday's weak ADP print.
- The Euribor futures strip is largely unch through the front 11 contracts with
Blues 0.5-1 ticks higher on the day. The Accounts of the ECB's March meeting
will be closely watched for any hints of tiering or further easing.
- The short sterling strip is down 0.5-1 tick as Brexit continues to dominate.