MNI US OPEN - Biden Gains on Trump in Key Swing States

NEWS

US (BBG): Biden Erases Trump's Lead in ‘Blue Wall’ States He Needs to Win

President Joe Biden has gained ground against Republican Donald Trump in six of seven key swing states, and significantly so in at least two of them. The results make for the Democrat’s strongest position yet in a monthly Bloomberg News/Morning Consult poll. The move in the president's direction comes after five months of mostly consistent Trump leads, and follows a State of the Union address that rallied Democrats and seemed to mitigate concerns about Biden’s age. The shift was significant in Wisconsin, where Biden leads Trump by one point after trailing him by four points in February, and in Pennsylvania, where the candidates are tied after Trump held a six-point lead last month.

US (BBG): Trump Social Media Firm Soars Ahead of Post-SPAC Deal Debut

Former president Donald Trump’s social media startup is rising ahead of its first session as a publicly traded company after the most high-profile blank-check deal in years. Trump Media & Technology Group Corp gained 20% in early premarket trading Tuesday after completing a merger with Digital World Acquisition Corp. The deal gives the parent company of Truth Social more than $275 million of much-needed capital, and provides a windfall on paper for Trump as he faces a mounting series of legal and financial woes.

US (The Times): Baltimore Bridge Collapse - Vehicles in Water After Ship Crashes

Baltimore’s Francis Scott Key Bridge has collapsed into the water after a ship collided with it early on Tuesday morning. At about 1.30am local time a large container ship, the Singapore-flagged Dali, slammed into one of the pillars of the 1.6-mile bridge and caught fire before sinking and causing multiple vehicles to fall into the water below, according to a video posted on Twitter/X. About 20 construction workers and three civilian cars are believed to have fallen into the river when the bridge collapsed, Baltimore County Fire Department reported.

US/CHINA (BBG): US CEOs Extend China Stay on Last-Minute Invite to Meet Xi

Some US executives in Beijing for a business summit are rejigging their long-planned schedules after receiving an invite to a Wednesday meeting with a top Chinese leader – widely expected to be President Xi Jinping. There’s a tacit understanding that the meeting will be with Xi, though his name doesn’t appear on written invitations, according to three people familiar with the matter, who asked not to be identified discussing confidential matters. A similar procedure was followed in November, when Xi attended a dinner with US business leaders during a San Francisco summit.

ISRAEL (MNI): Israeli Delegation Leaves Doha After Hamas Rejects US Proposal - Sky News

Sky News Arabia reporting that according to its sources the Israeli delegation has left Doha, Qatar after Hamas rejected the American ceasefire-for-hostages proposal that Israel agreed to. On the evening of 25 March, Hamas said that the proposal did not take into account its core demands of a “comprehensive ceasefire, an withdrawal from the Strip, the return of displaced people and a real prisoner exchange.” After the Hamas rejection Israeli Foreign Minister Israel Katz claimed that the US decision to abstain, rather than veto, a UN resolution calling for an immediate ceasefire in Gaza for the holy month of Ramadan was a contributing factor.

ECB (MNI): Muller Moves Nearer Centre of Governing Council, Eyeing June for Potential Easing

Speaking in Tallinn, Estonia, ECB's Muller stated that we're closer to the point where the ECB can start cutting rates, and data may confirm inflation trends for the ECB's June meeting. His comments are broadly inline with current market pricing, but represent Muller moving nearer the GC's base case for rates, having been more hawkish in his approach historically.

BOE (BBG): BOE’s Mann Says Markets Are Pricing in Too Many Cuts Now

Bank of England policymaker Catherine Mann comments in Bloomberg TV interview. Says recent easing of curve suggests markets are “complacent” over how long the BOE will hold interest rates. “I think they are pricing in too many cuts, that would be my personal view”. “We really have to recognize that the policy instrument that we have is a very short term instrument and the rest of the curve has to do with competition between various financial institutions. If we think of mortgage rates for example, and overall expectations of cuts going forward.”

RIKSBANK (MNI): First-Half Cut in Sight as Inflation Eases

Sweden’s central bank looks set to signal that it could cut interest rates in the first half of the year on Wednesday, bringing forward its projection for the likely beginning of its easing cycle from late 2025.While Riksbank Governor Erik Thedeen and colleagues could opt to signal easing by as soon as the May meeting, this would come before the likely timing of the European Central Bank’s first cut, at a time when the krona has been volatile. Alternatively they could steer towards June instead or else leave the precise timing ambiguous between the two months.

JAPAN (BBG): Japan’s Suzuki Says Not Ruling Out Steps on Excessive FX Moves

The Japanese government will take appropriate steps against excessive currency moves, without ruling out any measures, says Finance Minister Shunichi Suzuki. Suzuki says he’s watching FX moves with a high sense of urgency. Suzuki refrains from commenting on the topic of FX intervention, noting that his answer could have an unforeseen impact on the market. The exchange rate should move stably, reflecting economic fundamentals.

CHINA (BBG): More Yuan Volatility Ahead, PBOC Vigilant

MNI (Beijing) Weak sentiment, U.S dollar strength and the People’s Bank of China’s continued support for the yuan, unless other currencies extend their weakness, will keep volatility elevated and the central bank on guard over Q2, traders and advisors told MNI. CNY unexpectedly broke 7.20 last Friday against USD, closing at 7.2292, its weakest 2024 level and its softest point since Nov 20, 2023, after over two months of sideways consolidation at the 7.10 level. Offshore yuan also swung 600pips, its most volatile move this year.

CHINA (BBG): PBOC Extends Yuan Support as It Boosts Fix by Most Since January

China’s central bank reinforced its support for the under-pressure yuan by strengthening its daily reference rate for the managed currency by the most since January. The People’s Bank of China shifted its fixing by 0.1% with traders still on tenterhooks after the yuan sank to its weakest since November on Friday. The currency rose as much as 0.2% in offshore trading in response to the reference rate and traded little changed around the 7.218 per dollar level onshore.

RBA (MNI): RBA to Look Past Volatile Labour Data

Strong jobs data last week have injected further doubt into Reserve Bank of Australia productivity growth assumptions, though its initial reaction will be to look through volatile figures it believes to be largely driven by seasonal factors, MNI understands. Some former staffers have suggested uncertainty over productivity growth poses a threat to the RBA’s forecasts and could prompt it to leave the cash rate steady at 4.35% over 2024 as it aims to pull inflation back to its 2-3% target band.

DATA

SPAIN Q4 FINAL GDP +0.6% Q/Q (MNI)
SPAIN Q4 FINAL GDP +2% Y/Y (MNI)

SWEDEN DATA (MNI): Improvement in Confidence, But Services Pricing Plans Rebound

The Economic Tendency Indicator continued to improve in March, with the headline index up 2.4 points to 93.1 (vs a slightly upwardly revised 90.7prior). While still in "contractionary" territory, this signals a brighter outlook ahead for the Swedish economy and we expect the Riksbank's GDP forecast to be revised higher in tomorrow's MPR. The headline increase was driven by a rise in both consumer (87.5 vs 83.0 prior) and business (94.4 vs 92.1 prior) confidence.

JAPAN DATA (MNI): Japan's Feb Trimmed Mean Growth Moderates

Japan's trimmed mean measure of underlying inflation rose 2.3% in February, slowing from 2.6% in January, showing pass-through of cost increases continued to slow as import prices fell y/y for the 11th straight month, data released by the Bank of Japan showed on Tuesday. The trimmed mean print follows data released on Friday, which showed Japan's annual core consumer inflation rate rose 2.8% in February, up from January's 2.0%, the 23rd straight month above the 2% target.

JAPAN DATA (MNI): Japan Feb Services PPI Rises 2.1% vs. Jan +2.1%

• JAPAN FEB SERVICES PPI +2.1% Y/Y; JAN UNREV +2.1%
• JAPAN FEB SERVICES PPI +0.2% M/M: JAN UNREV -0.5%

Japan's services producer price index rose 2.1% y/y in February, marking the 36th straight rise and unchanged from January's 2.1%, showing continued pass-through of cost increases, preliminary data released by the Bank of Japan on Tuesday showed. Higher transportation and postal activities (+2.6% in Feb. vs. +2.5% in Jan.), real-estate services (+1.5% vs. +1.3%) and lower leasing and rental (+2.1% vs. +2.5%) drove the increase.

AUSTRALIA DATA (MNI): Westpac Consumer Sentiment Points to Persistent Soft Demand

Westpac consumer confidence for March eased 1.8% to 84.4 after rising the previous three months. It remains above January's level though. Through the volatility, the series has turned up as the RBA now seems firmly on hold, but it remains at depressed levels and improvement in sentiment is slow. Westpac notes that consumers remain "deeply pessimistic" and are more concerned about the economy, thus weak consumption is likely to persist for now.

FOREX: CHF Weakness Brings Major Levels in USD/CHF, EUR/CHF Into Play

• CHF is the poorest performing currency so far Tuesday, helping EUR/CHF narrow the gap with the key upside level and bull trigger at 0.9788. A break of this level, along with 0.9020 in USD/CHF could unlock the next stage of weakness for the CHF after last week's surprise SNB rate cut, at which the bank became the first in G10 to ease monetary policy after the post-pandemic tightening cycle.
• We wrote yesterday that while the AUDUSD technical theme remains bearish, exponential moving average indicators appear positive for AUDCHF, and the dovish SNB combined with the overall buoyant backdrop for global equities could point to further strength ahead for the cross.
• NZD fares better on an intraday basis, gaining off recent pullback lows to re-take the 0.60 handle and stabilise just below the 200-dma. This level, just above at 0.6076, marks the next upside resistance of note.
• Focus for the duration of the Tuesday sessions rests on the prelim US durable goods orders data for February ahead of the March consumer confidence release. The central bank speaker schedule is thinner, with just BoC's Wilkins set to speak later today.

US TSYS: Curve a Little Flatter, Tsys Off Highs After Overnight Spike

Tsys off overnight highs.

• TYM4 +0-03+ at 110-20 (110-17 to 23+ range), with volume running around the norm at ~216K.
• Familiar technical parameters are untouched and in play in that contract.
• Cash Tsy yields are flat to 2bp lower across the curve, light flattening seen.
• A contained spike higher in TY futures dominated in Asia.
• The move was quickly pared, with notable activity (~45K TYM4 lots) seen over a ~20-minute window.
• We didn’t see any meaningful headline flow at the time, with desks also struggling to pinpoint a fundamental driver.
• FOMC-dated OIS shows ~79bp of cuts through ’24, with ~19bp of easing priced through the June FOMC. Familiar levels are in play there.
• Durable goods data headlines the NY calendar today, with various house price metrics, regional Fed activity indicators and Conference Board consumer confidence data also due.
• Elsewhere, 5-Year Tsy supply will need to be digested.

EGBS: Core Firmer, BTP Spreads Tighter Amid Soft Tone From Hawkish Speakers

Core/semi-core EGBs are a touch firmer this morning, but still sit well short of yesterday's highs.

• A dovish reaction in Gilts to the latest comments from the BoE's Mann have spilled over somewhat into EGBs, while the historically hawkish ECB's Muller also appears to have moved closer to the market/GC base case of a June ECB cut.
• German GfK consumer confidence was a touch higher than expected but wasn't a market mover. Spanish Q4 GDP also confirmed flash estimates.
• Bunds are +21 at 132.77, though the first support remains some way off at 133.28 (Mar 25 high).
• German and French cash yields are 2-3bps lower today.
• The 2023 French fiscal deficit was 5.5% of GDP, versus the Government's target of 4.9% and wider than 4.8% in 2022. The 10-year OAT-Bund spread has widened almost 4bps over the last week, currently around 46bps.
• 10-year peripheral spreads to Bunds are generally tighter, with BTPs outperforming. The 10-year BTP/Bund spread is -2.0bps at 130.2bps, but remains almost 15bps above the narrowest levels of the year.
• The remainder of today's regional calendar is limited, though ECB Chief Economist Lane delivers a lecture at Trinity College Dublin at 1900GMT/2000CET.
• Focus remains on the March flash inflation prints later this week (Spain is due tomorrow). Our full inflation preview will be released later today.

GILTS: Rallying on Comments from BoE's Mann

Gilts rally in the wake of comments from ex-hawkish BoE dissenter Mann as she explained her reasoning for switching her vote to no change.

• Her comments around discretionary services inflation softening and expectations for slower wage growth will have driven the rally.
• Mann also noted that the market is doing the work for her, so she doesn't need to vote for a cut.
• Her comments leave her on the hawkish side of the BoE spectrum (as was generally expected), but she didn't explicitly say that rate cuts weren't appropriate here, just that markets expect too much.
• Gilt futures last +37 at 99.66 (99.27-99.70 range). Initial resistance seen at 100.05, Friday’s high.
• Cash gilt yields 3-4bp lower., light bull flattening seen.
• The presence of the upcoming GBP3.0bn auction of the 4.50% Jun-28 gilt will be factoring into the light flattening.
• SONIA futures now flat to +5.0, also firming post-Mann.
• BoE-dated OIS shows ~77bp of ’24 cuts after moving below 75bp earlier today.

EQUITIES: Eurostoxx 50 Futures Trade Either Side of 5000.00 Handle

A bullish trend condition in Eurostoxx 50 futures remains intact and the contract is trading closer to its recent highs. Last week’s cycle high confirmed once again a resumption of the uptrend and resulted in a break of the 5000.00 handle. Moving average studies remain in a bull-mode position, highlighting positive market sentiment. Sights are on 5074.7, a Fibonacci projection. Initial firm support is at 4915.20, the 20-day EMA. The trend condition in S&P E-Minis is unchanged and remains bullish. Last week’s extension reinforces this theme and the break of 5257.25, Mar 8 high, confirmed a resumption of the uptrend. Note that moving average studies remain in a bull-mode position reflecting positive market sentiment. Sights are on 5398.12, the top of a bull channel drawn from the Jan 17 low. Initial firm support is 5213.02, the 20-day EMA. A move lower is considered corrective.

• Japan's NIKKEI closed lower by 16.09 pts or -0.04% at 40398.03 and the TOPIX ended 3.16 pts higher or +0.11% at 2780.8.
• Elsewhere, in China the SHANGHAI closed higher by 5.176 pts or +0.17% at 3031.481 and the HANG SENG ended 144.68 pts higher or +0.88% at 16618.32.
• Across Europe, Germany's DAX trades higher by 12.97 pts or +0.07% at 18272.16,FTSE 100 lower by 9.53 pts or -0.12% at 7907.63, CAC 40 down 7.37 pts or -0.09% at 8143.54 and Euro Stoxx 50 down 1.97 pts or -0.04% at 5041.79.
• Dow Jones mini up 50 pts or +0.13% at 39747, S&P 500 mini up 14 pts or +0.27% at 5292.25, NASDAQ mini up 77 pts or +0.42% at 18589.25.

COMMODITIES: WTI Futures Continue Steady Climb Toward Resistance at $83.87

A bull theme in WTI futures remains intact and the latest pullback is considered corrective. Recent gains resulted in a break of $79.87, the Mar 1 high. The move higher confirms a resumption of the uptrend that has been in place since mid-December last year. Sights are on $83.87 next, the Oct 20 ‘23 high. A break of this level would open $84.87, the Sep 15 ‘23 high and a key resistance. Support to watch is $79.64, the 20-day EMA. The trend condition in Gold remains bullish and last week’s move higher reinforces this condition. The initial rally on Mar 21, delivered another all-time high and confirmed a resumption of the primary uptrend. Moving average studies remain in a bull-mode condition, reflecting positive market sentiment. This signals scope for a climb towards $2230.1, a Fibonacci projection. Key short-term trend support has been defined at $2146.2, the Mar 18 low.

• WTI Crude down $0.07 or -0.09% at $81.89
• Natural Gas up $0.01 or +0.81% at $1.628
• Gold spot up $5.98 or +0.28% at $2177.49
• Copper down $0.3 or -0.07% at $401.05
• Silver down $0.05 or -0.19% at $24.6275
• Platinum down $0.16 or -0.02% at $904.28