OPTIONS: Expiries for Mar27 NY cut 1000ET (Source DTCC)

• Stocks reversed modest overnight gains early Monday, extending lows by midmorning amid carry-over risk-off on President Trump policy concerns on tariffs while trading desks cited managed money rotation out of stocks into Fixed Income. Treasury safe haven support saw rates reverse early losses to moderately higher in 5s to 30s.
• The DJIA recovered from early selling but remains near mid-January levels trades up 27.83 points (0.06%) at 43453.5 (43343.67 low), S&P E-Minis down 20 points (-0.33%) at 6008.75, Nasdaq down 185.5 points (-1%) at 19335.37.
• Health Care and Financial sectors led gainers in the first half, carry-over support from Friday noted in pharmaceuticals amid concerns over a new Covid strain with "pandemic potential": Charles River Labs +4.46%, Amgen +3.03%, Regeneron Pharmaceuticals +2.88%.
• Insurance companies buoyed the Financials sector: Berkshire Hathaway +3.39%, Travelers Cos +3.14%, Progressive Corp+1.93%, Chubb Ltd+1.92%.
• Meanwhile, Consumer Discretionary and Information Technology sectors underperformed, Domino's Pizza -5.05% after missing earnings, Deckers Outdoor Corp -3.04%, Tesla Inc -2.77% and Ralph Lauren Corp -1.92% weighed on the Consumer Discretionary sector.
• Technology sector shares were hampered by the threat of tariffs weighing on foreign investment: Palantir Technologies -9.02%, Crowdstrike Holdings -4.53%, Super Micro Computer -4.04%, Western Digital Corp -3.96% and Arista Networks Inc -3.87%. Microsoft declined 1.8% on reports they canceled some leases for domestic data center capacity.

• EUR/USD: $1.0390-00(E1.2bln), $1.0450-55(E560mln)
• USD/JPY: Y149.00($751mln), Y149.75-80($790mln)
• USD/CNY: Cny7.3500($1.1bln)

Core FI has been supported by the latest round of equity weakness, with Bund futures gaining ~30 ticks since the US cash open to move back to 132.30. Today’s session high of 132.50 remains untested for now. 

• 10-year peripheral spreads to Bunds unsurprisingly widen, with the BTP/Bund spread now back at 109bps (+0.5bps on the session).
• SPGBs underperform peers slightly (+1bp today at 63bps), with today’s 15-year syndication mandate weighing at the margin. We expect a transaction tomorrow and pencil in a wide E5-10bln range. Meanwhile, headlines noting that the government will propose writing off E83bln of regional debt were not market moving, having been part of an agreement signed by the government in 2023.