HIGHLIGHTS
- Treasuries look to finish mixed, well off midday highs, curves flatter after a rocky start to the week opener.
- Much weaker Retail Sales and down-revision to prior offset by strong performances in core categories; Headline manufacturing index slipped -20, the lowest since Jan 2024.
- Short covering helped stocks gain despite ongoing global trade uncertainty, focus remains on Wednesday's FOMC policy announcement.
MNI US TSYS: Curves Twist Flatter Ahead Wednesday's FOMC Policy Annc
- Treasury futures looked to finish Monday's session mixed, well off midday highs, curves flatter (2s10s -4.117 at 25.178) with 2s through 10s trading progressively weaker after a rocky start. Treasuries extended early morning highs then lows after this morning's lower than expected Retail Sales and down-revision to prior - while ex-auto/gas and the Control Group comes out steady to higher than expected; sharp decline in Empire Manufacturing.
- Headline advance retail sales were much weaker than expected in February at 0.2% M/M (0.6% expected, -1.2% prior rev from -0.9%), but this was offset by strong performances in core categories. But the control group sales rose 1.0% vs the 0.4% expected, more than offsetting the downward revision to Jan (-1.0% vs -0.8% prelim).
- Headline manufacturing index slipped -20 (cons -2) in March from +5.7. It’s the lowest since Jan 2024 having been at its strongest reading since a particularly strong 20.2 in Nov and before that Apr 2023.
- Rates hit session highs after headlines aired where Pres Trump warned retaliation against Iran for any Houthi attacks.
- The Mar'25 10Y currently trades 110-18.5 (-2) vs. 110-14 low/110-30 high - still inside initial technical levels: resistance above at 111-25 (Mar 11 high), support below at 110-12.5/110-00 (Low Mar 6 & 13 / High Feb 7). Tsy 10Y yield 4.3043% last.
- Cross asset update: Bbg US$ index off lows (BBDXY -3.44 at 1262.27), Gold attempting to rise above 3,000 again (+15.15 at 2999.31), West Texas Crude mildly higher +0.39 at 67.57.
- Focus remains on Wednesday's FPMC policy annc
SOFR FIXES AND PRIOR SESSION REFERENCE RATES
SOFR Benchmark Settlements:
- 1M +0.00038 to 4.31678 (-0.00897 total last wk)
- 3M +0.00024 to 4.29529 (-0.00370 total last wk)
- 6M +0.00143 to 4.19980 (+0.01341 total last wk)
- 12M +0.01314 to 4.03098 (+0.02417 total last wk)
US TSYS: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 4.30% (+0.00), volume: $2.441T
- Broad General Collateral Rate (BGCR): 4.29% (+0.00), volume: $953B
- Tri-Party General Collateral Rate (TCR): 4.29% (+0.00), volume: $933B
- (rate, volume levels reflect prior session)
STIR: FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $104B
- Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $277B
FED Reverse Repo Operation
RRP usage retreats well below $100B to $89.496B this afternoon from $126.234B Friday. Compares to $58.770B (lowest level since mid-April 2021) on February 14. The number of counterparties at 25 from 29 prior.
US SOFR/TREASURY OPTION SUMMARY
Option desks reported better SOFR & Treasury put option volumes Monday as underlying futures retreated from midday highs, curves flatter with the short end underperforming. In turn, projected rate cuts through mid-2025 recede vs. morning levels (*) as follows: Mar'25 steady at -.2bp, May'25 at -6bp (-7.3bp), Jun'25 at -19.5bp (-22.5bp), Jul'25 at -28.7bp (-31.7bp).
SOFR Options:
-5,000 0QM5/0Q0N5 96.75/97.00/97.25 call tree spd, 0.5net
+20,000 SFRM5 95.50 puts, 0.5 ref 95.90
+10,000 SRFK5 95.75/95.81/95.87 put flys 1.25 ref 95.895
-10,000 SFRN5 95.87 puts 1.0 over 96.37/96.75 call spds
Block, 10,000 SFRM5 95.68/95.75/95.81/95.87 put condors, 1.25
5,000 SFRM5 95.81/95.93/96.06 call flys ref 95.91
+5,000 SFRM5 95.87 puts vs 0QM 96.06 puts, 1.75 net/front Jun over
+5,000 SFRM5 96.12/96.25/96.37/96.50 call condors, 1.0 ref 95.91
+20,000 SFRM5 95.68/95.81 put spds .5 over 95.87/96.06 call spds
1,000 0QM5 96.43 straddles ref 96.46
over 7,000 SFRK5 95.68/95.75 put spds
3,500 0QM5 96.56/96.75 call spds ref 96.415
8,500 0QM5 96.31/96.56/96.75 broken call flys ref 96.415
Treasury Options: (April options expire Friday)
5,400 TYM5 107.5/110 2x1 put spds, 25 net ref 110-22
5,800 FVJ5 107.75 puts, 12.5 ref 107-25
17,750 TYM5 110 puts ref 110-22.5
Block: 15,000 TYM5 113.5 calls, 23 w/ 17,500 TYM5 107.5 puts, 14 w/ 2,000 TYM5 110-21
over 13,000 TYJ5 109 puts, 1 last ref 110-15.5
1,300 TYJ5 109.75/110.75 2x1 put spds ref 110-25
25,000 FVJ5 108.5 call, 3 ref 107-27
30,000 TYJ5 110.75 calls, 21 ref 110-28.5
over 8,000 TYJ5 112.5 calls, 1 last
over 5,000 USK5 122/126 call spds, ref 117-04
1,750 TYK5 114.5 calls ref 110-23.5
MNI EGB OPTIONS: Multiple Large May Bund Structures Feature
Monday's Europe rates/bond options flow included:
- RXK5 129/130.5/132/133.5 call condor paper paid 0.335/0.345 on 20K.
- RXK5 127/126 ps, bought for 33.5 in 10k.
- RXK5 130c, bought for 49.5 in ~5.6k.
- RXK5 126.50/125.50ps, bought for 33 in 7.75k.
- ERJ5 97.875/98.00 call spread paper paid 2 on 10k
- ERK5 97.62/97.50ps 1x2, bought for 1 in 15k.
- ERM5 97.62/97.50ps bought for 1.75 in 16.5k.
MNI FOREX: NZDUSD Surges 1.2% to Fresh 2025 Highs
- Firmer risk sentiment on Monday has allowed the higher beta currencies to outperform in the G10 FX space. Added to this, weaker details within the US retail sales report has bolstered the softer dollar theme, allowing AUDUSD and NZDUSD to register gains of 0.93% and 1.22% respectively,
- Topside momentum for NZD has been exacerbated by the earlier breach of the 2025 highs, which has seen NZDUSD rise back above 0.5800 for the first time since mid-December. Furthermore, the solid bounce for equities is underpinning a strong move higher for NZDJPY, likely bolstering the renewed Kiwi optimism. This is the first time the cross has been above its 50-day EMA since January, having built a solid base in the low 83.00s earlier this month.
- The broad dollar offer has also assisted GBPUSD to print a fresh four-month high as the pair edges ever closer to the psychological 1.3000 mark. A close at current levels would be the highest daily close since the US election and should keep attention firmly on the November 06 high of 1.3048.
- In similar vein, EURUSD rose as high as 1.0929 as markets await tomorrow's special session in the Bundestag. Optimism over the German debt deal have been inspiring the optimism for the single currency, and the gap has been narrowing to the recovery highs of 1.0947. This level will need to be cleared before the market turns its focus to pivot resistance at 1.10 and a more notable cluster of medium-term resistance around the 1.12 mark.
- A relatively subdued session for USDJPY still saw an 80 pip range for the pair. Post data action saw an initial dip lower to 148.31 before being swiftly faded as markets latched on to the stronger-than-expected control group reading. Overnight session highs at 149.10 have capped the upside so far, and initial resistance comes in just above at 149.46, the 20-day EMA.
- German ZEW and Canadian CPI highlight Tuesday’s calendar, before the focus turns to major central bank decisions starting Wednesday.
MNI FX OPTIONS: Expiries for Mar18 NY cut 1000ET (Source DTCC)
- EUR/USD: $1.0745-55(E2.3bln), $1.0900-10(E678mln)
- USD/JPY: Y147.00($1.3bln), Y148.50($1.4bln), Y149.00($1.2bln), Y150.00($1.5bln)
- AUD/USD: $0.6320-30($1.5bln)
- USD/CNY: Cny7.2900($890mln)
MNI US STOCKS: Late Equities Roundup: Oil & Estate Management Continue to Lead
- Stocks quietly extended session highs in Monday's second half, SPX eminis back to March 10 levels amid a lack of any specific headline driver as policy uncertainty over global trade remains. Currently, the DJIA trades up 467.25 points (1.13%) at 41956.15, S&P E-Minis up 58.25 points (1.02%) at 5750.75, Nasdaq up 143.4 points (0.8%) at 17898.4.\
- Energy and Real Estate sectors continued to outperform in late trade, oil and gas stocks leading gainers as crude prices rebounded (WTI +.40 at 67.58): Targa Resources +3.50%, Marathon Petroleum +3.43%, Valero Energy +3.20% and ONEOK +2.85%.
- Investment trusts and management shares buoyed the Real Estate sector: BXP +4.99%, Simon Property Group +3.20%, Iron Mountain +2.91% and Digital Realty Trust +2.67%.
- On the flipside, Consumer Discretionary and Communication Services sectors underperformed in late trade, Tesla -4.61%, Garmin -1.07%, Ulta Beauty -0.80% and Deckers Outdoor -0.60%.
- Meanwhile, interactive media and entertainment shares weighed on the Communication Services sector: Meta Platforms -0.41%, Alphabet -0.21% and Paramount Global +0.04%.
MNI EQUITY TECHS: E-MINI S&P: (M5) Oversold But Remains Bearish
- RES 4: 5976.83 50-day EMA
- RES 3: 5864.25 Low Jan 13 and a recent breakout level
- RES 2: 5859.54 20-day EMA
- RES 1: 5726.75 High Mar 12
- PRICE: 5688.25 @ 13:29 GMT Mar 17
- SUP 1: 5559.75 Low Mar 13
- SUP 2: 5483.50 2.00 proj of the Dec 6 ‘24 - Jan 13 - Feb 19 swing
- SUP 3: 5396.00 2.236 proj of the Dec 6 ‘24 - Jan 13 - Feb 19 swing
- SUP 4: 5341.87 2.382 proj of the Dec 6 ‘24 - Jan 13 - Feb 19 swing
The trend condition in S&P E-Minis remains bearish and fresh cycle lows last week reinforced current conditions. Moving average studies are in a bear-mode set-up highlighting a dominant downtrend. Sights are on 5483.50, a Fibonacci projection. Note that the short-term trend condition is oversold, a corrective bounce would allow this set-up to unwind. Firm resistance to watch is 5976.83, the 50-day EMA.
COMMODITIES
MNI AMERICAS OIL: WTI Crude is higher on the day following Trump’s Iran comments
March 17 - Americas End-of-Day Oil Summary: WTI Crude is higher on the day following Trump’s comments directed at Iran as the US increases pressure on Yemen’s Houthis. Further gains came in the afternoon ahead of tomorrow’s Trump-Putin call. China measures aimed at boosting domestic consumption have also supported. Doubts around the US and global economy and rising OPEC+ output from April remain bearish factors.
- The U.S. will keep hitting Houthi targets until they stop attacking ships the U.S. defense secretary said to Fox News on Sunday. Trump posted on Truth Social saying “every shot fired by the Houthis will be looked upon as being shot from the weapons and leadership of Iran.”
- Any maximum pressure tactics by the Trump administration on Iranian oil could have a significant impact on prices according to head of commodity strategy Helima Croft speaking with CNBC. “You’re looking at a $5 to $10/bbl price spike pretty quickly.”
- The outlook for Russian sanctions is unclear with talks regarding a ceasefire in Ukraine ongoing. US President Trump is due to speak to Russian President Putin on Tuesday.
- Goldman Sachs has reduced its Brent forecast by $5 to $71/bbl for December 2025, according to Bloomberg. It expects Brent to trade between $65/bbl and $80/bbl and average $68/bbl in 2026.
- OIES has reduced the Brent forecast by $2.4/bbl to $74.4/bbl for 2025 and by $2/bbl to $72.1/bbl in 2026 due to ongoing tariff-related uncertainty.
- Motiva’s 626 kb/d Port Arthur, Texas, refinery had a unit process upset on March 15 resulting in flaring.
- GasBuddy’s Patrick De Haan notes that more than two -thirds of US gasoline stations are at $2.99/gal or less today.
- The NOAA 6–14-day outlook is bearish for heating demand through Mar 30 with no below-normal conditions forecast in the 6–10-day period though the Midwest cools in the 8-14 day period. Depressed heating demand is likely everywhere in days 6-10 but rising in PADD 2 during the 8–14-day period.
- US cracks were firmer, with diesel reversing some of the significant declines seen last week. Gasoline is extending gains after last week’s large stock draw.
- WTI Apr futures were up 0.6% at $67.56
- WTI May futures were up 0.7% at $67.35
- RBOB Apr futures were up 1.5% at $2.18
- ULSD Apr futures were up 1.7% at $2.20
- US gasoline crack up 1$/bbl at 24.01$/bbl
- US ULSD crack up 1.1$/bbl at 24.94$/bbl
TUESDAY DATA CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 18/03/2025 | 0930/0930 |  GB | Consumer Price inflation weight update | |
| 18/03/2025 | 1000/1000 | ** | GB | Gilt Outright Auction Result |
| 18/03/2025 | 1000/1100 | * |  EU | Trade Balance |
| 18/03/2025 | 1000/1100 | *** |  DE | ZEW Current Expectations Index |
| 18/03/2025 | - |  US | FOMC Meetings with S.E.P. | |
| 18/03/2025 | 1230/0830 | *** |  CA | CPI |
| 18/03/2025 | 1230/0830 | *** | US | Housing Starts |
| 18/03/2025 | 1230/0830 | ** | US | Import/Export Price Index |
| 18/03/2025 | 1255/0855 | ** | US | Redbook Retail Sales Index |
| 18/03/2025 | 1315/0915 | *** | US | Industrial Production |
| 18/03/2025 | 1530/1130 | ** | US | US Treasury Auction Result for 52 Week Bill |
| 18/03/2025 | 1700/1300 | ** | US | US Treasury Auction Result for 20 Year Bond |
| 19/03/2025 | 2350/0850 | ** |  JP | Trade |
| 19/03/2025 | 2350/0850 | * | JP | Machinery orders |
| 19/03/2025 | 0001/0001 | * | GB | Brightmine pay deals for whole economy |
| 19/03/2025 | 0300/1200 | *** | JP | BOJ Policy Rate Announcement |
| 19/03/2025 | 0430/1330 | ** | JP | Industrial Production |