Highlights:
- Headline risk at the fore as Fed enter pre-meeting media blackout
- EUR/GBP on cusp of test on downtrendline resistance
- Rangebound trade leaves market with little conviction
US TSYS: Losses Pared Ahead Of A Session Likely Guided By Headlines
- Treasuries have pared Friday’s post-Powell (and Kugler) losses amidst broader risk-off moves with equities under pressure either side of the Atlantic.
- Factors include continued U.S. growth worry and signs of tension within the German fiscal negotiations as the Greens grow a little louder when it comes to voicing some lingering areas of dissent.
- It’s a lighter start to this week’s macro docket, with US policy headlines likely in the driving seat, whilst Wednesday’s US CPI report looms large. NY Fed inflation expectations are likely watched more closely than usual considering the recent spike in the U.Mich equivalent, a survey with partisanship issues.
- Cash yields are 4.4-6.8bp lower with the belly leading the day’s declines.
- 2s10s at 30.4bps (near unch) very roughly consolidates the early March steepening to one-month highs.
- TYM5 at 111-01+ (+15) sits close to session highs on solid cumulative volumes of 500k, although has remained firmly within Friday’s range with its post-payrolls high of 111-11+.
- Friday’s high marked a push closer to resistance at 111-15 (Mar 5 high) after which lies 112-01 (Mar 4 high) which recent declines have been deemed corrective before support at 110-12+ (Mar 6 low).
- Data: NY Fed consumer inflation expectations Feb (1100ET, 1500GMT)
- Bill issuance: US Tsy $76B 13W & $68B 26W bill auctions (1130ET)
STIR: Partial Paring Of Post-Powell Hawkish Repricing
- Broader risk-off moves have seen Fed Funds implied rates pare some of Friday’s post-Powell push higher on being in no hurry to cut rates and comments on the ability to look through tariff-driven inflation, with the paring largest in the back end of the 2025.
- Combined with Friday’s payrolls report prior to Powell, which had some dovish details but avoided a sharp deterioration, and the June contract stands the highest relative to pre-NFP levels, with 28bp of cuts priced vs 33bp pre-NFP.
- Cumulative cuts from 4.33% effective: 0.5bp Mar, 10.5bp May, 28bp Jun, 41bp Jul and 76bp Dec.
- Today sees the NY Fed consumer survey including its inflation expectations results which are likely to receive closer than usual attention with growing focus in Fed communications on expectations.
- The FOMC is now in media blackout ahead of the Mar 18-19 meeting.
- See a wrap of last week’s macro events, including Powell’s remarks here.
MACRO ANALYSIS: MNI US Employment Insight: Dovish Details vs Dovish Pricing
- We have published and e-mailed to subscribers the MNI US Employment Insight.
- Please find the full report including MNI analysis and pertinent views from analysts here.
STIR: Net Short Setting Seen In Most SOFR Futures On Friday
OI data points to a net short setting bias in most SOFR futures on Friday. Net long cover in SFRU5 provided the most substantial deviation from that theme.
| 07-Mar-25 | 06-Mar-25 | Daily OI Change |
| Daily OI Change In Packs |
SFRZ4 | 1,076,860 | 1,069,492 | +7,368 | Whites | -2,426 |
SFRH5 | 1,321,097 | 1,317,245 | +3,852 | Reds | +50,083 |
SFRM5 | 1,114,574 | 1,113,448 | +1,126 | Greens | +15,357 |
SFRU5 | 893,565 | 908,337 | -14,772 | Blues | +9,876 |
SFRZ5 | 1,001,701 | 979,670 | +22,031 |
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SFRH6 | 650,187 | 628,931 | +21,256 |
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SFRM6 | 590,503 | 598,400 | -7,897 |
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SFRU6 | 596,717 | 582,024 | +14,693 |
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SFRZ6 | 777,171 | 770,016 | +7,155 |
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SFRH7 | 462,729 | 458,967 | +3,762 |
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SFRM7 | 456,795 | 455,202 | +1,593 |
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SFRU7 | 304,253 | 301,406 | +2,847 |
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SFRZ7 | 390,896 | 381,289 | +9,607 |
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SFRH8 | 212,506 | 214,122 | -1,616 |
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SFRM8 | 175,009 | 174,520 | +489 |
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SFRU8 | 123,569 | 122,173 | +1,396 |
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EUROPE ISSUANCE UPDATE:
- "The EU has mandated BofA Securities, Credit Agricole CIB, DZ BANK, Goldman Sachs Bank Europe SE and Santander as Joint Lead Managers for its upcoming EUR Fixed Rate RegS Bearer new 10-year benchmark due 12th December 2035. There will be a co-lead group comprised of Commerzbank, Danske, Intesa, KBC, MPS, UBS. The transaction will be launched tomorrow, subject to market conditions. "
- Note that the last 10-year EU-bond launch at syndication (Feb 2024) saw E7bln sold. We see upside risks to this and pencil in E7-10bln (although think it's likely we see the bottom half of this range).
FOREX: Early USD Gains Reverse in Low Conviction Session
USD had traded firmer through the European open, but much of that progress is reversing here - putting USD toward the bottom end of the G10 table in recent trade. Headlines remain few and far between - leaving markets with little conviction and, quite clearly, subject to non-directional trade.
- GBP gains have slightly run out of steam, however GBP/USD remains either side of the 1.2900 handle as markets continue to parse reports of incoming budget and spending cuts in the UK ahead of the March 26th Spring Statement. GBP is nonetheless among the poorest performers on the session.
- A solid set of Norwegian inflation numbers this morning has underpinned a rally in NOK, which outstrips all others in G10. Outdoing the higher-than-expected Swedish inflation print last week, underlying CPI in Norway lurched to 3.4% vs. Exp. 2.9% - a data outturn that's likely to pressure those looking for Norges Bank rate cuts as soon as this month's decision.
- EUR/NOK has slipped toward the lower half of this year's range, but support at 11.5738 needs to be taken out before the February and YTD lows can be considered at 11.5413.
- Markets look ahead to the US CPI, PPI releases later this week, with NY Fed inflation expectations the sole US release. The Fed are now inside their pre-meeting media blackout period - meaning no monpol headlines are to cross for the next 10 days or so. ECB's Nagel is set to speak on German growth later today.
FOREX: EUR Gains Press EUR/GBP Toward Trendline Resistance
Further fade in the dollar manages to tip EUR/USD through the overnight highs - market now needs to go a further ~25 pips to take out Friday's high (1.0889) and print new best levels for 2025.
- As has been the case for much of the morning, markets are pretty light on conviction so far today, with the early USD strength and subsequent reversal not really triggered by data or headline flow - we noted on several occasions last week the outsized volumes in currency futures (particularly in the first half of the week), but it's the opposite today: EUR futures print cumulative volumes of 15% below average for this time of day, AUD futures 25% below, GBP 26% below and CHF 26% below what you'd expect to see.
- In the crosses, EUR/GBP's holding the ~2% rally off lows, but failed to secure a close above the 200-dma on Friday to cement the strong weekly close. The price is higher again today, and a close at current or higher levels would confirm the technical break and could confirm a test of downtrendline resistance drawn off the mid-'24 highs at 0.8417.
OPTIONS: Expiries for Mar10 NY cut 1000ET (Source DTCC)
- EUR/USD: $1.0815-25(E712mln), $1.0850-55(E520mln), $1.0875(E533mln)
- USD/JPY: Y146.85-00($547mln), Y147.40-55($999mln), Y148.00($1.3bln)
- USD/CAD: C$1.4500($795mln)
EQUITIES: Trend in Eurostoxx 50 Futures Remains Unchanged and Bullish
- The trend in the Eurostoxx 50 futures contract is unchanged, it remains bullish with price trading closer to its recent trend highs. Key short-term support has been defined at 5373.00, the Mar 4 low. A reversal lower and a break of this level would signal scope for a deeper retracement and expose the 50-day EMA at 5306.33. For bulls, a continuation higher would open the 5600.00 handle next.
- A bear threat in S&P E-Minis remains present following last week’s move lower that reinforced a short-term downtrend. The contract traded to a fresh short-term cycle low again, Friday, marking an extension of the current bear leg. This highlights a stronger reversal and a double top pattern on the daily scale. The focus is on 5658.00, the Sep 12 2024 low. Initial firm resistance to watch is 5993.68, the 50-day EMA.
COMMODITIES: Last Week's Cycle Lows Reinforce Bearish WTI Future Trend
- A bearish trend condition in WTI futures remains intact and last week’s fresh short-term cycle lows reinforce current conditions. Recent weakness has resulted in a clear breach of support at $70.20, the Feb 6 low. This confirmed a resumption of the downtrend that started Jan 15 and has paved the way for an extension towards $63.61 next, the Oct 10 ‘24 low. Key short-term pivot resistance is seen at $70.54, the 50-day EMA.
- Gold is unchanged. The trend condition remains bullish and the recent pullback appears to have been a correction. A stronger rally would refocus attention on $2962.2, a Fibonacci projection. This would also open the $3000.0 handle. On the downside, a resumption of weakness would instead suggest scope for a deeper correction and expose support around the 50-day EMA, at $2823.8. The 50-day average marks a key support.
| Date | GMT/Local | Impact | Country | Event |
| 10/03/2025 | 1500/1100 | ** |  US | NY Fed Survey of Consumer Expectations |
| 10/03/2025 | 1530/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
| 10/03/2025 | 1530/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
| 11/03/2025 | 2330/0830 | ** |  JP | Household spending |
| 11/03/2025 | 2350/0850 | *** | JP | GDP |
| 11/03/2025 | 0001/0001 | * |  GB | BRC-KPMG Shop Sales Monitor |
| 11/03/2025 | 1000/0600 | ** | US | NFIB Small Business Optimism Index |
| 11/03/2025 | - | *** |  CN | New Loans |
| 11/03/2025 | - | *** | CN | Money Supply |
| 11/03/2025 | - | *** | CN | Social Financing |
| 11/03/2025 | 1255/0855 | ** | US | Redbook Retail Sales Index |
| 11/03/2025 | 1400/1000 | *** | US | JOLTS jobs opening level |
| 11/03/2025 | 1400/1000 | *** | US | JOLTS quits Rate |
| 11/03/2025 | 1600/1200 | *** | US | USDA Crop Estimates - WASDE |
| 11/03/2025 | 1700/1300 | *** | US | US Note 03 Year Treasury Auction Result |
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