AMERICAS OIL: Heavy Canadian Crude Rally Continues

Not many revelations in the Powell testimony, though his characterization about the labor market and neutral rates in the Q&A seemed noteworthy from a hawksih perspective.

• Asked whether he sees evidence of a higher neutral rate emerging, Powell says: "Yes. I mean, let me say there was a lot of reason to be concerned about downside risk in the labor market toward the middle of [last] year, but really that concern has diminished significantly. The labor market is very strong. I think the evidence is - my own view, and there are many different views on this, but is that the neutral rate will have risen meaningfully. Very hard to be precise about it. From what it was, it was clearly very, very low before the pandemic. Extraordinarily low, historically so. But yes, I think it's moved up, and many of my colleagues on the FOMC feel so feel that way too. It certainly seems that way."
• This is arguably close to his characterization of the upward shift in the neutral rate vs pre-pandemic levels in previous appearances.
• But we can't recall the last time Powell called the labor market "very strong" - indeed he in recent months he repeatedly called it "solid", albeit having "cooled" from an "overheated" state (as he did in his prepared text today). Might be a slip of the tongue (he has routinely called the economy "strong overall"), but potentially noteworthy after January's surprise drop in the unemployment rate.

Israeli Prime Minister Benjamin Netanyahu has warned of a "return to intense fighting" if Hamas does not return Israeli hostages by Saturday. The Jerusalem Post reports that the decision was reached unanimously by the Israeli Security Cabinet.

• Netanyahu: "I have just concluded an in-depth four-hour discussion in the Security Cabinet... If Hamas does not return our hostages by Saturday noon, the ceasefire will end, and the military will return to intense fighting until Hamas is finally defeated.”
• Netanyahu: "In light of Hamas's announcement of its decision to violate the agreement and not release our hostages, I instructed the IDF last night to amass forces inside and around the Gaza Strip... This operation is underway as we speak and will be completed as soon as possible."
• The comments come as US President Donald Trump begins a bilateral meeting with King Abdullah II of Jordan at the White House - his first meeting with an Arab leader since returning the office and first with a regional leader since his widely reported comments on the displacement of Gazans and US-led reconstruction of the Gaza Strip.
• King Abdullah said ahead of the meeting that Jordan will "support Trump" to achieve "peace and stability" in the region.
• Haaretz notes that Trump's Middle East envoy Steve Witkoff is expected to visit Israel later today, after a trip to Russia. Netanyahu noted in his statement that the Security Cabinet "welcomed Trump's revolutionary vision for the future of Gaza,"

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• 02/11 $5B #Israel $2.5B 5Y +120, $2.5B 10Y +135
• 02/11 $1B Snap Inc 8NC3 7%
• 02/11 $Benchmark Tennessee Valley Authority 30Y +60
• 02/11 $Benchmark Flowers Food 10Y +125, 30Y +150
• 02/11 $Benchmark Zimmer Biomet 2Y +70a, 5Y +95a, 10Y +120a