NEWS
MNI FED PREVIEW - Waiting Out Uncertainty
The FOMC will continue to exercise patience in policy setting at its March meeting, leaving the Fed funds target range on hold at 4.25-4.50% and making no changes to its formal rate guidance. The updated quarterly economic projections will show higher inflation and weaker growth in 2025 compared with December's forecasts, in large part due to the impact of ongoing and expected future government policy shifts.
US/RUSSIA (BBG): Trump to Speak With Putin Tuesday in Ukraine Ceasefire Push
President Donald Trump said he’ll speak with Russian President Vladimir Putin on Tuesday as the US presses for an end to fighting in Ukraine and European nations rush to bolster their support for Kyiv. “We are doing pretty well I think with Russia,” Trump told reporters aboard Air Force One on Sunday. “We’ll see if we have something to announce maybe by Tuesday,” he said, adding that there is “a very good chance” for a deal.
US (BBG): Bessent Not Worried About Market, Calls Corrections Healthy
Treasury Secretary Scott Bessent, a former hedge fund manager, said he’s not worried about the recent downturn that’s wiped trillions of dollars from the equities market as the US seeks to reshape its economic policies. “I’ve been in the investment business for 35 years, and I can tell you that corrections are healthy, they are normal,” Bessent said Sunday on NBC’s Meet The Press. “I‘m not worried about the markets. Over the long term, if we put good tax policy in place, deregulation and energy security, the markets will do great.”
US (WSJ): The Days of Set-and-Forget Investing Just Ended for Many Americans
The Trump administration's chaotic mix of tariffs and government budget cuts have jolted legions of everyday investors, leading them to question the assumption that they should buy and hold stocks on autopilot. In the first half of March, individual investors have been trading in their 401(k)s at more than four times the normal level, according to record-keeper Alight Solutions.
US (WSJ): Job Seekers Hit Wall of Salary Deflation
The salary bump that people who switch jobs used to command has vanished.
UK (BBG): UK Axes Regulators, Targets Welfare in Economic Growth Drive
The UK government will abolish more business regulators and scale back welfare spending to drive stagnant economic growth. Chancellor of the Exchequer Rachel Reeves is summoning eight of the UK’s main regulators, including the Financial Conduct Authority, to Downing Street on Monday to discuss her plan to cut regulatory costs on business by a quarter. Work and Pensions Secretary Liz Kendall is expected to unveil plans on Tuesday to cut the welfare bill by up to £6 billion ($7.8 billion) to encourage more people to work.
RUSSIA (FT): Investors seek to profit from Russia as Trump pursues rapprochement
Investors are turning to sanctions-proof bets on Russian bonds and the rouble to wager that Donald Trump’s rapprochement with Vladimir Putin will send a wave of capital back into Russia’s economy. Hedge funds and brokers have been scoping out how to trade Russian assets that have been shunned by the west but which they believe could rally sharply if the US president relaxes sanctions as part of a deal to broker a ceasefire in Russia’s war against Ukraine, investors and traders said.
CHINA (MNI): China To Release Childcare Subsidies, Boost Income
Chinese authorities are set to release plans for childcare subsidies, as well as increasing incomes of low-income rural populations, in a bid to boost consumption, Li Chunlin, deputy director of the National Development and Reform Commission, told reporters on Monday.
CHINA (MNI): PBOC Mulls New Tools Targeting Consumption
The People’s Bank of China plans to introduce new targeted tools to provide low-cost funding for key consumption sectors, an official told reporters on Monday.
DATA
MNI: ITALY FEB HICP 0.1% M/M, 1.7% Y/Y
Sales of newly built residential properties in China's first and second-tier cities saw a 0.1% m/m increase in February, a figure consistent with January, according to data released by the National Bureau of Statistics covering 70 large- and medium-sized cities on Monday.
China's retail sales quickened to a four-month high of 4.0% y/y over January-February, rising from December's 3.7% growth and meeting the 4.0% forecast, despite a higher comparison base for the same period last year, according to data released Monday by the National Bureau of Statistics, which typically combines results of the first two months to smooth out the Spring Festival impact.
EGBS: Curves Bull Flatten Ahead Of Tomorrow’s Fiscal Vote
The German 5s30s curve has bull flattened 4.3bps this morning, with fresh demand seen across EGBs over the last 90 minutes.
- Ahead of tomorrow’s Bundestag vote on incoming Chancellor Merz’s fiscal proposals, local media have pointed to the potential for fiscal dissent within the CDU/CSU, SPD & Greens, although the bid was already in play before the latest speculation surrounding that issue did the rounds (note similar stories were already apparent over the weekend).
- This is probably a contributing factor to the bid, although the derailing of the fiscal reform seems unlikely at this stage.
- Bund futures are +63 ticks at 127.86, through the initial resistance point at 127.65. Next resistance of note at the Mar 10 high (128.33).
- 10-year EGB spreads to Bunds are within 1bp of Friday’s closing levels, with meaningful fresh macro cues lacking this morning and Friday’s ratings action coming in broadly as expected. Greece has regained investment grade status from Moody’s (upgrade to Baa3; outlook stable).
- Over the weekend, ECB’s de Guindos continued to express confidence in the inflation outlook, and re-iterated that increased trade tensions “would have a much worse impact on growth than on inflation”. De Guindos also provided similar comments this morning.
- Italian final February HICP confirmed flash estimates at 1.7% Y/Y.
GILTS: Rallying On Wider Move, Wider To Bunds
The bid in EGBs has provided spillover support for gilts.
- Futures as high as 92.12.
- The bearish technical theme in the contract is still intact, with initial resistance at the 20-day EMA (92.28) unchallenged thus far.
- Yields now little changed to 2bp lower, curve flatter.
- Both 2s10s and 5s30s have edged away from cycle highs after failing to close above their respective psychological resistance points (50bp & 100bp).
- 10s lag Bunds, spread ~3.5bp wider at 183bp, underscoring the Bund-led nature of the rally.
- Essentially no movement priced into BoE-dated OIS for this week, 18.5bp showing through May, ~23.5bp through June, ~37.5bp through August and 54bp through year-end.
- We still look for the next cut to come in May.
- SONIA futures effectively flat.
- Macro and cross-market cues are set to dominate early this week, with much of this week’s UK focus set to fall on the BoE decision and labour market data, both due Thursday.
- Note that we haven’t seen a single call for anything other than an unchanged Bank Rate on Thursday, which should leave focus on the vote split and accompanying communication.
- Expect greater detail in our gilt week ahead preview.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.458 | +0.2 |
May-25 | 4.270 | -18.5 |
Jun-25 | 4.221 | -23.4 |
Aug-25 | 4.080 | -37.6 |
Sep-25 | 4.033 | -42.2 |
Nov-25 | 3.939 | -51.7 |
Dec-25 | 3.917 | -53.9 |
FOREX: JPY on Backfoot as Market Postures for Fed, Trump-Putin Call
- Markets are on a surer footing to start Fed week, although the narrow proximity to pullback lows for equities continues to underscore fragile sentiment headed into this week's FOMC rate decision and policy statement.
- The JPY is weaker against all others in early dealing, with USD/JPY already showing through Friday's high of Y149.02 - meaning 149.20 is the next consequential level to the upside. The USD is mixed-to-lower, with Antipodean currencies outperforming - moderately countering the sharp weakness in AUD, NZD into last week's close.
- The February retail sales release is the calendar highlight Monday, with markets expecting sales to bounce back this month from January's -0.9% for the advance reading. RBA's Hunter is the sole central bank speaker - with the Fed inside their pre-rate decision media blackout period.
- Russia-Ukraine remains a key issue, with Trump set to speak to Putin tomorrow - at which they'll go over potential sticking points for a ceasefire deal, namely territory, power plants, security guarantees, involvement of foreign troops and market access.
COMMODITIES: Gold Uptrend Still Firm Having Pierced $3000
A clear uptrend in Gold remains intact and last week’s move higher reinforces current conditions. The yellow metal traded to a fresh all-time high and price has also pierced the psychological $3000 handle. A bearish condition in WTI futures remains intact and the latest recovery appears corrective - for now. Recent weakness resulted in a breach of $70.20, the Feb 6 low. This confirmed a resumption of the downtrend that started Jan 15.
- WTI Crude up $0.59 or +0.88% at $67.75
- Natural Gas up $0.06 or +1.51% at $4.166
- Gold spot up $6.06 or +0.2% at $2989.32
- Copper down $1.65 or -0.34% at $488.8
- Silver down $0.07 or -0.19% at $33.731
- Platinum up $1.36 or +0.14% at $997.91
EQUITIES: Trend Condition in Stocks Remains Bearish
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. The medium-term trend direction in the Eurostoxx 50 futures contract remains up and the recent pullback is considered corrective - for now. However, note that support at the 50-day EMA, at 5314.94, has been pierced.
- Japan's NIKKEI closed higher by 343.42 pts or +0.93% at 37396.52 and the TOPIX ended 32.27 pts higher or +1.19% at 2748.12.
- Elsewhere, in China the SHANGHAI closed higher by 6.566 pts or +0.19% at 3426.128 and the HANG SENG ended 185.59 pts higher or +0.77% at 24145.57.
- Across Europe, Germany's DAX trades higher by 61.14 pts or +0.27% at 23046.41, FTSE 100 higher by 13.92 pts or +0.16% at 8645.73, CAC 40 up 26.1 pts or +0.33% at 8053.5 and Euro Stoxx 50 up 13.3 pts or +0.25% at 5416.74.
- Dow Jones mini down 208 pts or -0.5% at 41304, S&P 500 mini down 27.25 pts or -0.48% at 5616, NASDAQ mini down 99 pts or -0.5% at 19620.5.
| Date | GMT/Local | Impact | Country | Event |
| 17/03/2025 | 1215/0815 | ** |  CA | CMHC Housing Starts |
| 17/03/2025 | 1230/0830 | * | CA | International Canadian Transaction in Securities |
| 17/03/2025 | 1230/0830 | *** |  US | Retail Sales |
| 17/03/2025 | 1230/0830 | ** | US | Empire State Manufacturing Survey |
| 17/03/2025 | 1300/0900 | * | CA | CREA Existing Home Sales |
| 17/03/2025 | 1400/1000 | * | US | Business Inventories |
| 17/03/2025 | 1400/1000 | ** | US | NAHB Home Builder Index |
| 17/03/2025 | 1400/1500 |  EU | ECB's Lagarde awarding of diplomas at University Aix-Marselle | |
| 17/03/2025 | 1530/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
| 17/03/2025 | 1530/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
| 18/03/2025 | - |  JP | Bank of Japan Meeting | |
| 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 |