EURJPY TECHS: Has Pierced Resistance At The 50-Day EMA

For today's Treasury financing requirements (1500ET), MNI has pencilled in $800B marketable borrowing for Q1 2025 (Jan-Mar), vs the November refunding estimate of $823B. That includes maintaining the $850B end-Q1 TGA cash balance target signalled in the previous refunding.

• For Q2 (Apr-Jun) we get a forecast for the first time and opinions are mixed - MNI's $450B for marketable borrowing is a little on the high side of expectations,  which we've seen a central range of $100B - $500B depending on various assumptions about how Treasury sees the April tax take, QT, and end-quarter cash.  
• For example, Wrightson ICAP writes that "we think the Treasury could lower its quarter-end cash balance objective to $500 billion or so without running undue operational risks, but we have no idea whether the new team at Treasury will share that view", and instead have likewise pencilled in a $850B TGA cash balance at end-quarters. And they write that their borrowing requirement estimates of "$820 billion for Q1 and $275 billion for Q2.  If the Treasury announces lower TGA estimates, we would reduce our borrowing estimates for the first two quarters of the year on a dollar-for-dollar basis"
• Unless well outside this range of expectations, this is unlikely to be a market mover in and of itself, but we will be paying attention to the interplay between cash assumptions, QT, and the marketable borrowing requirement.

Rather slow start to February, a few names on the docket including supra sovereign from Romania - that has yet to launch Monday. Comes after January 2025 finished with record $288.45B total bond issuance from domestic & foreign corporate and supra-sovereigns.

• Date $MM Issuer (Priced *, Launch #)
• 02/03 $1.25B Romania 12Y +300
• 02/03 $800M Hess Midstream 3NC1
• 02/03 $500M Air Transport 7NC3 7.25%
• 02/03 $Benchmark L-Bank 2Y SOFR, 5Y
• Expected Tuesday:
• 02/04 $3B EIB WNG 10Y +60a
• 02/04 $Benchmark BNG Bank 3Y SOFR+38a

• US Stocks have been climbing off this morning's lows ever since Mexican President Sheinbaum said tariffs are paused for a month from now, having said Mexico had a "good" call with Trump, which led to some "accords".
• The Trump administrations quixotic trade policies remain uncertain for Canada, China and the EU for that matter amid mixed negotiation headlines Monday after Trump signed orders for 25% tariffs over the weekend on Mexico & Canada, 10% on China.
• Currently, the DJIA trades down 0.94 points (0%) at 44545.04, S&P E-Minis down 25.75 points (-0.42%) at 6041, Nasdaq down 154.9 points (-0.8%) at 19473.01.
• Health Care and Consumer Staples sectors continued to lead gainers in late trade, IDEXX surged +11.2% after beating earnings and providing positive 2025 guidance, Molina Healthcare +3.86%, AbbVie +3.46%. The Consumer Staples sector was buoyed by Kroger +2.7%, Costco +2.69%, Tyson Foods +1.98%.
• Conversely, Information Technology and Consumer Discretionary sectors continued to underperform: tech laggers included Super Micro Computer -4.14%, Apple -3.22% while Dell declined 3.13%. Weighing on the Consumer Discretionary sector: Tesla -5.01%, Wynn Resort -3.59%, NVR -3.31%.
• Reminder, another heavy earnings docket this week includes the following on Monday-Tuesday: PepsiCo Inc, Archer-Daniels-Midland Co, Snap Inc, Alphabet, Match Group, Amgen Inc, Advanced Micro Devices, Lumen Technologies, Chipotle Mexican Grill, Juniper Networks Inc.