EXECUTIVE SUMMARY
- MNI US: Bessent Downplays Market Volatility, Says Tax Agenda On Track
- MNI US: Govt Shutdown Risk Ticks Up As Schumer Withholds Dem Support From House CR
- MNI US DATA: PPI Pipeline Pressures Remain Solid Even Pre-Tariffs
- MNI US DATA: Jobless Claims Surprise Lower Again, Marginal Lift In ‘DOGE’ Regions
- MNI US DATA: PPI Details Appear To Confirm Core PCE Pickup
US
MNI US: Bessent Downplays Market Volatility, Says Tax Agenda On Track
US Treasury Secretary Scott Bessent has downplayed this week's market volatility in an interview with CNBC. Bessent says the administration is "not concerned about a little volatility," stressing that the market should be more focused on the medium and long term outlook. Bessent also downplays his previous comments interpreted as preparing markets for a recession, saying a "detox does not have to be a recession."
NEWS
MNI US: Govt Shutdown Risk Ticks Up As Schumer Withholds Dem Support From House CR
The chance of a government shutdown on Saturday increased after Senate Minority Leader Chuck Schumer (D-NY) said Democrat senators should withhold their votes from the full-year funding measure that passed the House of Representatives this week. Schumer said on the Senate floor: “Funding the government should be a bipartisan effort but Republicans chose a partisan path… Because of that, Republicans do not have the votes in the Senate to invoke cloture on the House CR,”
MNI NATO: Trump Meeting With NATO's Rutte Underway Shortly
President Donald Trump is shortly due to host NATO Secretary General Mark Rutte at the White House for a meeting and business lunch. The pair are not scheduled to appear for joint press conference, but a handful of reporters will be present at the top for a Q&A that is expected to get underway momentarily. The meeting comes amid a major recalibration of the post-war security architecture, with some NATO members questioningTrump’s commitment to Article 5 – the mutual defence clause of the NATO treaty that underpins the foundation of the alliance's collective security.
MNI SECURITY: Hopefully Russia Will Do The Right Thing - Trump
Wires carrying comments from US President Donald Trump, speaking ahead of a meeting with NATO Secretary General Mark Rutte at the White House. Trump comments appear to temper expectations of an immediate ceasefire breakthrough after Russian President Vladimir Putin's tentative support for a US-brokered ceasefire framework. Trump says his special envoy Stephen Witkoff is in "serious discussions" with Putin. The meeting is understood to be ongoing.
MNI RUSSIA: Putin Aide Rejects Ceasefire Plan As 'Temporary Breather' For Ukraine
Russian state media reporting comments from President Vladimir Putin's foreign policy aide Yuri Ushakov following a call on 12 March with White House National Security Adviser Mike Waltz. Ushakov says he 'outlined Russia's position on the need for a long-term settlement in talks with the US' and hopes the US will 'take into account Russia's demands' for a resolution to the war. Claims that the proposed 30-day ceasefire 'is nothing more than a temporary breather for Ukrainian forces,' and that 'no-one needs steps that just imitate peace actions in Ukraine'.
MNI GERMANY: Bitter Debt Brake Debate Not Necessarily An End To Fiscal Package
With debate underway in the old Bundestag on proposals from the incoming gov't parties on reforming the constitutional debt brake to fund defence and infrastructure spending, comments from lawmakers are hitting wires and have the potential to move markets. It should be noted that this Bundestag session is extremely controversial given that is is formed by the 'old' Bundestag rather than those that won seats in the February election.
MNI US-JAPAN: Def Mins To Meet 30 March As US Pushes Japan To Lift Military Spending
Sankei reports that US Defence Secretary Pete Hegseth will meet his Japanese counterpart Gen Nakatani in Tokyo on 30 March, the first meeting of the two since President Donald Trump's inauguration. The report claims that Hegseth will also meet with PM Shigeru Ishiba during the visit. The ostensible subject of the meeting will be discussing the strengthening of response capabilities and a review of command and control between Japan's Self-Defence Forces and the US military.
MNI US TSYS: Trade Uncertainty Saps Risk Sentiment
- Brief two-way trade as Treasury futures pare losses then retreat again following latest PPI inflation data: headline PPI printed 0.0% M/M, below the 0.3% consensus, but January was revised up 0.2pp to 0.6%; core PPI (ex-food/trade/energy) saw only a modest dip to 0.2% from 0.3% prior (0.3% expected, Jan unrevised at 0.3% rounded).
- Initial jobless claims were lower than expected at 220k (sa, cons 225k) in the week to Mar 8 after a marginally upward revised 222k (initial 221k). Continuing claims meanwhile also surprised lower as they fell to 1870k (sa, cons 1888k).
- Treasuries bounced off midmorning lows, look to finish moderately highs amid ongoing trade war uncertainty and recession concerns. President Trump threatened soaring tariffs on US imports of EU alcoholic beverages earlier, Tsy Sec Bessent followed up with: "if trading partners want to ratchet things up, surplus countries will take the biggest hit".
- After the bell, Jun'25 10Y futures trade +9.5 at 110-30, well below technical resistance above at 111-25 (High Mar 11). Curves flatter, 2s10s mildly steeper +.538 at 32.498. Stocks weaker but off lows (SPX eminis -50.0 at 5554.75), Gold nearing 3000 as it climbs over 2983.0, Crude weaker (WTI -1.16 at 66.52).
- Bbg US$ index off early high of 1270.18 to modestly higher late Thursday at 1267.47 (+1.12).
OVERNIGHT DATA
MNI US DATA: PPI Details Appear To Confirm Core PCE Pickup
The details of February's PPI report appear to confirm what we thought yesterday after CPI, which is that core PCE would be higher than its CPI equivalent. There don't appear to be any downside surprises in the PCE-relevant details - overall it's not clear PCE estimates will be changed (much) again after this release.
- Airline passenger services were much stronger in PPI than in CPI (0.0% M/M vs -0.4% in CPI), as is auto insurance (1.2% M/M), with portfolio management steady at 0.5% M/M, and health and medical insurance up to 0.1% M/M (from -0.9%).
- Physician services also looks to be more robust than in Jan (0.5% M/M vs -0.4% prior).
- Overall with most categories around flat or picking up vs sharp drops in January, this means a "less negative" as opposed to outright strongly positive contribution to PCE compared to January's pullback - but still appears to be enough to ensure that core PCE will exceed core CPI.
- This is the opposite dynamic as seen in CPI, where multiple categories pulled back in February from a strong January.
MNI US DATA: PPI Pipeline Pressures Remain Solid Even Pre-Tariffs
Higher revisions to prior offset a slightly softer-than-expected set of PPI readings for February. Overall, pipeline price pressures remain relatively elevated vs pre-pandemic rates, suggesting that goods price inflation will remain underpinned.
- Headline PPI printed 0.0% M/M, below the 0.3% consensus, but January was revised up 0.2pp to 0.6%; core PPI (ex-food/trade/energy) saw only a modest dip to 0.2% from 0.3% prior (0.3% expected, Jan unrevised at 0.3% rounded).
- On the headline side, final demand goods prices decelerated to a 4-month low 0.3% M/M (from 0.6% prior), entirely on the back of energy prices printing a 5-month low -1.2% (foods accelerated to a 3-month high 1.7%); final demand services printed -0.2% M/M, lowest in 7 months, but this was largely on the back of a 1.0% drop in trade (which are imputed by measuring changes in margins).
- While this was the second consecutive sequential slowdown in core PPI, and the third on a Y/Y basis (3.3% vs 3.4% prior), the 3M and 6M seasonally-adjusted annualized rates of change remain elevated (3.6% / 3.0%, the 3M being a 9-month high).
- An upward drift in import prices, on the back of recent and forthcoming increases in tariffs, is one factor that is likely to see core PPI to remain elevated. This will continue to put upside pressure on core goods prices, which had been disinflationary forces for much of 2023/24. As we noted previously, the report is mostly watched for the inputs to the PCE price gauge, and they appeared to confirm that sequential core PCE inflation would come in above CPI as had been expected.
MNI US DATA: Jobless Claims Surprise Lower Again, Marginal Lift In ‘DOGE’ Regions
Initial and continuing claims surprised lower, neither for payrolls reference periods although initial is just one week away. The combination continues to point to a low layoffs and no further deterioration in what had been a cooling in hiring conditions.
- Initial jobless claims were lower than expected at 220k (sa, cons 225k) in the week to Mar 8 after a marginally upward revised 222k (initial 221k).
- It’s a second week that downplays what had been a sharp increase to 242k back in the week to Feb 22.
- The four-week average meanwhile has drifted a little higher again to 226k for its highest since December but remains close to the 218k in 2019 and is still not showing any sign of significant acceleration in layoffs.
- There was a slight build in initial claims across Maryland, Virginia and Washington DC when trying to assess a federal government layoff angle (in addition to the deferred redundancy program that won’t show until Oct). Cumulative initial claims in those areas increased from 6.9k to 7.8k for the highest since early Feb although it’s still just about within typical seasonals ranges and continuing claims in those areas are comfortably within range.
- The -13k to 213k for national non-seasonally adjusted initial claims shrugged off that small rise in those three regions, in keeping with a typical seasonal pattern.
- Continuing claims meanwhile also surprised lower as they fell to 1870k (sa, cons 1888k) in the week to Mar 1 after an unrevised 1897k at what had been close to recent highs.
MNI CANADA DATA: Building Permits January Drop Doesn't Alter Upward Trend
- Canada building permits fell -3.2% (cons -5.0%) to CAD12.8B in January after jumping 11.6% in December, with latest declines led by Ontario.
- Residential permits -3.4% to CAD8.8B, on Ontario multi-family units, but are +29.3% YOY.
- Non-residential permits meanwhile fell for the fourth straight month -2.7% to CAD4.0B; -3.2% YOY. Drop mainly due to decline in industrial construction component.
- In constant dollars total permits in Jan -2.5% MOM, 13.4% YOY.
MARKETS SNAPSHOT
Key market levels of markets in late NY trade:
DJIA down 448.15 points (-1.08%) at 40910.01
S&P E-Mini Future down 63.25 points (-1.13%) at 5541.5
Nasdaq down 272 points (-1.5%) at 17378.1
US 10-Yr yield is down 4 bps at 4.272%
US Jun 10-Yr futures are up 10/32 at 110-30.5
EURUSD down 0.0033 (-0.3%) at 1.0855
USDJPY down 0.57 (-0.38%) at 147.67
WTI Crude Oil (front-month) down $1.16 (-1.71%) at $66.52
Gold is up $48.54 (1.65%) at $2983.27
European bourses closing levels:
EuroStoxx 50 down 31.03 points (-0.58%) at 5328.39
FTSE 100 up 1.59 points (0.02%) at 8542.56
German DAX down 109.27 points (-0.48%) at 22567.14
French CAC 40 down 50.75 points (-0.64%) at 7938.21
US TREASURY FUTURES CLOSE
3M10Y -3.729, -3.15 (L: -4.422 / H: 4.734)
2Y10Y +0.363, 32.323 (L: 30.955 / H: 34.159)
2Y30Y +0.632, 64.413 (L: 63.146 / H: 66.597)
5Y30Y +0.795, 56.695 (L: 55.029 / H: 57.73)
Current futures levels:
Jun 2-Yr futures up 2.875/32 at 103-17.75 (L: 103-13.5 / H: 103-19)
Jun 5-Yr futures up 7.5/32 at 107-30.75 (L: 107-18.75 / H: 108-01.25)
Jun 10-Yr futures up 10/32 at 110-30.5 (L: 110-12.5 / H: 111-02.5)
Jun 30-Yr futures up 20/32 at 117-5 (L: 116-00 / H: 117-12)
Jun Ultra futures up 23/32 at 122-16 (L: 120-31 / H: 122-25)
MNI US 10YR FUTURE TECHS: (M5) Trend Needle Points North
- RES 4: 113-05+ 2.0% 10-dma envelope
- RES 3: 112-13 1.500 proj of the Jan 13 - Feb 7 - Feb 12 price swing
- RES 2: 112-01/02 High Mar 4 / 1.382 proj of Jan 13-Feb 7-12 swing
- RES 1: 111-25 High Mar 11
- PRICE: 110-20 @ 10:09 GMT Mar 13
- SUP 1: 110-12+/110-00 Low Mar 6 / High Feb 7
- SUP 2: 109-29 50-day EMA and a key near-term support
- SUP 3: 109-13+ Low Feb 24
- SUP 4: 108-21 Low Feb 19
The trend structure in Treasury futures remains bullish. This is reinforced by moving average studies that are in a bull-mode condition, highlighting a dominant uptrend and positive market sentiment. Recent gains have resulted in a print above 111-22+, the Dec 3 ‘24 high. A clear breach of this level would strengthen a bullish theme and open 112-02 and 112-13, Fibonacci projection points. Firm support is at 110-00, the Feb 7 high.
SOFR FUTURES CLOSE
Mar 25 +0.008 at 95.708
Jun 25 +0.025 at 95.960
Sep 25 +0.035 at 96.215
Dec 25 +0.040 at 96.360
Red Pack (Mar 26-Dec 26) +0.045 to +0.055
Green Pack (Mar 27-Dec 27) +0.055 to +0.060
Blue Pack (Mar 28-Dec 28) +0.055 to +0.055
Gold Pack (Mar 29-Dec 29) +0.035 to +0.050
SOFR FIXES AND PRIOR SESSION REFERENCE RATES
SOFR Benchmark Settlements:
- 1M -0.00132 to 4.31918 (-0.00303/wk)
- 3M +0.01051 to 4.29928 (+0.00692/wk)
- 6M +0.04150 to 4.20238 (+0.01871/wk)
- 12M +0.07010 to 4.02273 (+0.02340/wk)
US TSYS: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 4.31% (-0.01), volume: $2.489T
- Broad General Collateral Rate (BGCR): 4.30% (-0.01), volume: $968B
- Tri-Party General Collateral Rate (TCR): 4.30% (-0.01), volume: $946B
- (rate, volume levels reflect prior session)
STIR: FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $98B
- Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $273B
FED Reverse Repo Operation
RRP usage retreats to $113.435B this afternoon from $131.055B Wednesday. Compares to $58.770B (lowest level since mid-April 2021) on February 14. The number of counterparties at 29 from 35.
MNI PIPELINE: Corporate Bond Update: $13B to Price Thursday
- Date $MM Issuer (Priced *, Launch #)
- 03/13 $6B *World Bank 5Y SOFR+42
- 03/13 $2B *DBS $500M 3Y +42, $1B 3Y SOFR+60, $500M 5Y SOFR+65
- 03/13 $1.75B #Bank of Nova Scotia 3Y SOFR+56
- 03/13 $1.25B *Kommuninvest 2Y SOFR+31
- 03/13 $1B #OMERS Finance 5Y SOFR+65
- 03/13 $1B #Federal Home Loan 2Y +5.5
MNI BONDS: EGBs-GILTS CASH CLOSE: Equity Pullback Keeps Core FI Underpinned
Front-end Bunds and long-end Gilts outperformed on the respective curves Thursday, with EGB periphery/semi-core spreads widening.
- Core FI weakened in European morning trade, with the EGB space weighed down in part by Italian/Greek supply. Eurozone IP (above consensus, but in-line with MNI tracking) didn't appear to be a negative trigger in itself.
- But US tariff concerns once again returned to the forefront of market movements, with Bunds gaining as President Trump threatened soaring tariffs on US imports of EU alcoholic beverages. Meanwhile renewed Green Party opposition to the incoming government's fiscal plan also saw a Bund boost.
- A renewed pullback in equities saw yields enter the cash close at/near the lows.
- The German curve bull steepened, with the UK's bull flattening. BTPs and GGBs underperformed on the periphery, again with supply a factor.
- Friday's agenda includes UK monthly activity / GDP, Italian industrial production, final Feb CPI for France/Germany/Spain, and appearances by ECB's Escriva and Cipollone.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 4.2bps at 2.183%, 5-Yr is down 3.6bps at 2.486%, 10-Yr is down 2.2bps at 2.855%, and 30-Yr is up 0.9bps at 3.175%.
- UK: The 2-Yr yield is down 3.3bps at 4.192%, 5-Yr is down 3.8bps at 4.3%, 10-Yr is down 4.5bps at 4.677%, and 30-Yr is down 4.5bps at 5.281%.
- Italian BTP spread up 3.2bps at 114.8bps / Greek up 2.9bps at 84.8bps
MNI FOREX: Cross/JPY Weakens amid Lower US Equities, USDMXN Prints New 2025 Lows
- Thursday’s session has been characterized by another bout of US equity weakness. The direction of the greenback has been less clear to the waning sentiment than in recent sessions, leaving the Japanese yen as the key beneficiary from the moves.
- As such, AUDJPY is down ~0.9% as we approach the APAC crossover, and the ongoing weakness/volatility in equity markets will keep this cross firmly in the spotlight in coming weeks. Both 20- and 50-day EMAs have acted as strong resistance, keeping a bearish threat at the fore. Two lows at 91.86 provide initial support, of which a breach would target a move to the carry unwind lows around 90.00 from August last year.
- For USDJPY, yesterday’s flurry above 148.00 has proved short-lived and spot tracks closer to 147.50 in late European trade. The bearish trend structure keeps the focus on cycle lows at 146.54, before 145.92, the Oct 4 2024 low.
- EURUSD attempted to pullback from its recent highs, printing 1.0823 in the aftermath of the US PPI data on Thursday. However, dips remain well supported following last week’s impressive 5% rally, keeping the topside vulnerable as markets digest the ongoing US growth concerns and Eu fiscal developments.
- The ongoing resilience for the Mexican peso gained traction despite the weakness in equities, prompting USDMXN to print fresh 2025 lows below 20.13 support. On the downside, immediate attention turns to the December low at 20.0219, with greater downside momentum targeting 19.7618, the Nov 7 low. Resistance moves down to the 20- and 50-day moving averages, intersecting around the 20.40 mark.
- Friday will bring UK monthly GDP data and US preliminary UMich sentiment and inflation expectations figures.
FRIDAY DATA CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 14/03/2025 | 0700/0700 | ** |  GB | UK Monthly GDP |
| 14/03/2025 | 0700/0800 | ** |  SE | Unemployment |
| 14/03/2025 | 0700/0700 | ** | GB | Trade Balance |
| 14/03/2025 | 0700/0700 | ** | GB | Index of Services |
| 14/03/2025 | 0700/0700 | *** | GB | Index of Production |
| 14/03/2025 | 0700/0800 | *** |  DE | HICP (f) |
| 14/03/2025 | 0700/0700 | ** | GB | Output in the Construction Industry |
| 14/03/2025 | 0730/0730 | GB | DMO calendar for first 3 weeks of FY 25/26 confirmed | |
| 14/03/2025 | 0745/0845 | *** |  FR | HICP (f) |
| 14/03/2025 | 0800/0900 | *** |  ES | HICP (f) |
| 14/03/2025 | 0900/1000 | * |  IT | Industrial Production |
| 14/03/2025 | 0930/0930 | GB | BoE/Ipsos Inflation Attitudes Survey | |
| 14/03/2025 | - | *** |  CN | New Loans |
| 14/03/2025 | - | *** | CN | Money Supply |
| 14/03/2025 | - | *** | CN | Social Financing |
| 14/03/2025 | 1230/0830 | ** |  CA | Monthly Survey of Manufacturing |
| 14/03/2025 | 1230/0830 | ** | CA | Wholesale Trade |
| 14/03/2025 | 1315/1415 |  EU | Cipollone in panel discussion at "Fifty years of Consob: present and future - Reflections in Bocconi" Milan | |
| 14/03/2025 | 1400/1000 | *** |  US | U. Mich. Survey of Consumers |
| 14/03/2025 | 1400/1000 | ** | US | University of Michigan Surveys of Consumers Inflation Expectation |
| 14/03/2025 | 1700/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
| 14/03/2025 | 1700/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |