Highlights:
- Equities sag as Europe corrects off record highs; defence names particularly weak
- SNB cut, Riksbank hold - BoE expected unchanged
- US weekly claims on the docket, alongside litany of ECBspeak
US TSYS: Carry-Over Support, Extending Highs on Weaker Stocks
- Treasury futures are extending overnight highs at the moment, carry-over support after Wednesday's post-FOMC rally, while weaker equities over the last hour are contributing to the move. Brief dip in Tsys overnight as EGBs lagged core peers on incoming supply before the weaker equities spurred risk off bid.
- Currently, the Jun'25 10Y contract trades +9.5 at 111-09.5 vs. 111-11 high, initial technical resistance above at 111-25 (High Mar 11), a clear breach of this level would open 112-02 and 112-13, Fibonacci projections.
- Tsy 10Y yield slips to 4.2045% (-.0383), March 11 lows, curves mixed: 2s10s -.478 at 25.746, 5s30s +.112 at 52.944.
- BBG US$ index bouncing to March 14 levels (BBDXY +4.19 at 1268.58), Gold weaker but still above 3000.0 at 3027.95.
- Bank of England policy annc at 0800ET (after Riksbank/steady and SNB/cut overnight).
- US Data resumes at 0830ET with Initial Jobless Claims, Current Account Balance and Philadelphia Fed Business Outlook, followed by Leading Index and Existing Home Sales at 1000ET. Tsy bills & end-of-March coupon annc at 1100ET, $75B each 4W & 8W bill auctions at 1130ET, $18B 10Y TIPS re-open (91282CML2) at 1300ET, Treasury buyback operation at 1400ET.
SNB Keeps Options Open But Re-Flags Downside CPI Risks In Intro Remarks
SNB governing council so far leaves its options open for the meetings ahead but re-flags downside inflation risks, highlighting lower inflationary pressure than before despite overall CPI coming in broadly in line with their forecast recently. Key excerpts from the introductory remarks below:
- On monetary policy outlook: "Uncertainty about global economic and inflation developments has increased significantly. As a result, the outlook for inflation in Switzerland, too, is currently very uncertain. At present, the risks are predominantly to the downside. With our interest rate cut, we are taking into account the low inflationary pressure and the downside risks. At the same time, we are supporting economic activity in Switzerland. In light of the heightened uncertainty, we will continue to monitor the situation closely and adjust our monetary policy if necessary, to ensure that monetary conditions remain appropriate."
- On inflation forecast: "Our new conditional inflation forecast has hardly changed since December. Without today’s rate cut, the forecast would have been lower in the medium term"
CANADA: Globe & Mail-PM Carney Expected To Call Snap Election For 28 April
Globe and Mail reporting that according to its sources, new PM Mark Carney is set to call a snap general election to take place on Monday 28 April. The calling of a snap election has been seen as an inevitability due to a number of factors.
- A procedural reason is that parliament returns from prorogation on 24 March. As this will be a new session, it requires a Speech from the Throne, followed by a confidence vote in the gov't.
- The LPC sits as a minority gov't, and crucially the two opposition parties that previously had backed the Liberals in confidence votes, the left-wing New Democratic Party (NDP) and the regionalist Bloc Quebecois (BQ) have withdrawn their support. This would have seen the gov't fall and a snap election called anyway. It comes as less of a blow for the PM to call the election himself.
- The tactical reason for a snap election is that the Canadian political landscape has been upended in recent weeks, not so much by the change in leadership at the top of gov't, but by the impact of US President Donald Trump's campaign of tariffs on Canadian exports and aggressive rhetoric regarding the country becoming part of the United States.
- Support for Carney's centre-left Liberal Party of Canada (LPC), which sat ~20% behind the main opposition centre-right Conservative Party of Canada (CPC) as recently as early January, has skyrocketed to the point where betting markets now view the LPC as favourites to win the most seats (see chart below).
- Finally, there is the day-to-day business reason behind a snap election, in that Carney does not currently hold a seat in the Commons, barring him from speaking to the chamber. It is unclear where Carney might seek to stand. Growing up in Edmonton, Alberta, Carney could seek to become the first ever LPC leader to represent a riding from western Canada.
Chart 1. Betting Market Implied Probability of Party Winning Most Seats, %
Source: Polymarket
EUROPE ISSUANCE UPDATE
Spain auction results
- E1.699bln of the 0.50% Apr-30 Obli. Avg yield 2.757% (bid-to-cover 1.99x).
- E3.189bln of the 3.15% Apr-35 Obli. Avg yield 3.382% (bid-to-cover 1.54x).
- E1.587bln of the 3.45% Jul-43 Obli. Avg yield 3.9% (bid-to-cover 1.76x).
France MT auction results
- E3.497bln of the 2.40% Sep-28 OAT. Avg yield 2.59% (bid-to-cover 3.49x).
- E3.3bln of the 2.75% Feb-30 OAT. Avg yield 2.8% (bid-to-cover 3.36x).
- E3.481bln of the 0% May-32 OAT. Avg yield 3.1% (bid-to-cover 3.58x).
- E3.216bln of the 3.00% May-33 OAT. Avg yield 3.23% (bid-to-cover 3.17x).
Ireland auction results
- E550mln of the 2.60% Oct-34 IGB. Avg yield 3.038% (bid-to-cover 2.22x).
- E450mln of the 1.70% May-37 IGB. Avg yield 3.213% (bid-to-cover 2.35x).
FOREX: USD Erases Post-Fed Losses, With Heavy Volume GBP, EUR Sales
- The greenback has more than erased the post-Fed weakness on this latest leg higher - EUR/USD and GBP/USD now comfortably through yesterday's lows, accelerating the price action as volumes really pick up on the break. No specific headline or news trigger behind this move, which isn't being endorsed by cross-market moves: the front-end of the US curve is holding yesterday's drift lower, although US equity futures are edging off the better levels and moving closer toward unchanged.
- As a result, the USD's comfortably the best performer so far, with JPY not far behind. AUD and NZD continue to underperform, meaning NZD/USD has slipped closer toward the 100-dma of 0.5738, opening a >50 pip gap with the mid-week high. AUD/NZD is posting a strong daily candle pattern, having bounced 50 pips off the pullback and cycle low, taking out yesterday's high in the process.
- Rate decisions so far this morning have more-or-less toed the line in Switzerland and Sweden, with the BoE also expected unchanged later today. Weekly US claims data is the calendar highlight, although the central bank speaker slate is busy: 8 ECB speakers are due, headlined by ECB's Lagarde who's appearing in front of an EU parliamentary hearing.
OPTIONS: Expiries for Mar20 NY cut 1000ET (Source DTCC)
Slippage in the EUR/USD rate has put spot through a series of larger options expiries set to roll off today: EUR/USD: $1.0870-75(E851mln), $1.0900-10(E1.9bln).
- Other sizeable strikes today include:
- USD/JPY: Y150.00-15($847mln), Y150.50-70($1.2bln)
- EUR/GBP: Gbp0.8400(E580mln)
- AUD/USD spot opening sizeable gap with $0.6400-15(A$1.7bln)
EQUITIES: US Megacaps Led Lower by Softer Europe; Profit-Taking Likely Culprit
- The pre-market US equity sell-off is sticking and accelerating in recent trade - with the e-mini S&P now challenging the pre-Fed level. Alongside the swift sell-off in US equity futures across the European morning, pre-market trade shows Magnificent 7 names have more than erased their pre-market gains:
- Tesla is over 4% off the pre-market high, NVIDIA 2% off, Meta 1.5% off, Amazon 1% off and Microsoft 0.7% off. This leads to futures pointing to a lower open on Wall Street in three hours time
- European markets seem to be leading the move: Germany's DAX is lower by over 2% on the day, opening a 2.7% gap with the defence name-led alltime high posted mid-week. It's these defence names that are leading the losses, meaning today's price action may well be driven by momentum-driven profit-taking rather than fundamental newsflow: Rheinmetall is lower by over 8% today, although remains higher by over 100% (!) year-to-date.
EQUITIES: Eurostoxx 50 Futures Holding Onto This Week's Gains
- Eurostoxx 50 futures have recovered from their recent lows and the contract is holding on to this week’s gains. The M/T trend direction remains up and the recent pullback is considered corrective. Support to watch is the 50-day EMA, at 5555.52. It has recently been pierced. A clear break of it would highlight a stronger short-term bear threat and suggest scope for a retracement towards 5202.00, a Fibonacci retracement. A continuation higher would open 5600.
- The trend condition in S&P E-Minis is bearish. Moving average studies are unchanged and remain 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. Recent gains are considered corrective and the bounce is allowing this set-up to unwind. Firm resistance to watch is 5955.55, the 50-day EMA.
COMMODITIES: WTI Future MA Studies Remain in Bear Mode Position
- A bearish condition in WTI futures remains intact and the latest round of gains appear corrective - for now. Recent weakness resulted in a breach of $69.80, the Feb 4 low. This confirmed a resumption of the downtrend that started Jan 15 and has paved the way for an extension towards $63.73 next, the Oct 10 ‘24 low. MA studies are in a bear-mode position, highlighting a dominant downtrend. Key pivot resistance to watch is $69.20, 50-day EMA.
- A clear uptrend in Gold is intact and this week’s resumption of the bull cycle reinforces current conditions. The yellow metal has cleared the psychological $3000.0 handle. Today’s fresh trend high reinforces the bull theme and sights are on 3079.2 next, a Fibonacci projection. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend and positive market sentiment. Support is at $29443.8, the 20-day EMA.
| Date | GMT/Local | Impact | Country | Event |
| 20/03/2025 | 1100/1100 | ** |  GB | CBI Industrial Trends |
| 20/03/2025 | 1200/1200 | *** | GB | Bank Of England Interest Rate |
| 20/03/2025 | 1200/1200 | *** | GB | Bank Of England Interest Rate |
| 20/03/2025 | 1200/1300 |  EU | ECB's Lane At UCC Economics Society's Conference | |
| 20/03/2025 | 1200/1200 | GB | Agents summary of business conditions | |
| 20/03/2025 | 1230/0830 | * |  CA | Industrial Product and Raw Material Price Index |
| 20/03/2025 | 1230/0830 | *** |  US | Jobless Claims |
| 20/03/2025 | 1230/0830 | ** | US | WASDE Weekly Import/Export |
| 20/03/2025 | 1230/0830 | ** | US | Philadelphia Fed Manufacturing Index |
| 20/03/2025 | 1230/0830 | * | US | Current Account Balance |
| 20/03/2025 | 1400/1000 | *** | US | NAR existing home sales |
| 20/03/2025 | 1430/1030 | ** | US | Natural Gas Stocks |
| 20/03/2025 | 1530/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 20/03/2025 | 1530/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 20/03/2025 | 1650/1250 | CA | BOC Governor speaks in Calgary | |
| 20/03/2025 | 1700/1300 | ** | US | US Treasury Auction Result for TIPS 10 Year Note |
| 21/03/2025 | 2330/0830 | *** |  JP | CPI |
| 21/03/2025 | 0001/0001 | ** | GB | Gfk Monthly Consumer Confidence |
| 21/03/2025 | 0700/0700 | *** | GB | Public Sector Finances |
| 21/03/2025 | 0745/0845 | ** |  FR | Manufacturing Sentiment |
| 21/03/2025 | 0900/1000 | ** | EU | EZ Current Account |
| 21/03/2025 | 1230/0830 | ** | CA | Retail Trade |
| 21/03/2025 | 1305/0905 | US | New York Fed's John Williams | |
| 21/03/2025 | 1500/1600 | ** | EU | Consumer Confidence Indicator (p) |
| 21/03/2025 | 1700/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
| 21/03/2025 | 1700/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
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