What to Watch: ADP Private Employ, FOMC, Chair Powell Presser

Main focus on Wed's FOMC at 1400ET (Powell presser at 1430ET), 50bp hike anticipated and more to follow. Short end remains under pressure, pricing in potential for more aggressive rate hikes from the Fed (already at five 50bp hikes) by year end.

• Yield curves flatter, 2s10s currently -1.988 at 16.484. Last time markets priced in aggressive hikes (75bp in the mix) 2s10s spent five days inverted in early April, -9.531 low on April 3.
• Big day with modest volumes w/ Japan and China markets closed for spring holiday (Golden Week in Japan continues, mkt reopen Fri), TYM2 currently <250k.
• Economic data on tap:
  • ADP Employment Change (455k, 383k) at 0815ET
  • Trade Balance (-$89.2B, -$107.1B) at 0830ET
  • S&P Global US Services PMI (54.7, 54.7) Comp PMI (55.1, 55.1) 0945ET
    
  • ISM Services Index (58.3, 58.5), 1000ET
• Treasury supply:
  • US Tsy $30B 119D bill auction at 1130ET
• Stocks firmer, near highs (ESM2 +20.0 at 4189.25), another heavy earnings release day.
• Geopol risk: Market remains alert for developments on Russia war in Ukraine, knock-on effect to markets. EU Members Still Debating Russia Oil Sanctions: Bloomberg reporting that EU members are still debating the nature of proposed embargo on Russian oil as part of the sixth package of sanctions.
• Cross-Asset: Crude rebounds (WTI +4.14 at 106.55); Gold near steady at 1868.55.