MEXICO: Sheinbaum: No Tit-For-Tat Tariffs On The US

The ISM manufacturing headline index was a little softer than expected in Feb, but still maintained only its second >50 reading since late 2022. However, details were more mixed. New orders and employment were notably softer than expected, setting the tone for market reaction as the former was particularly surprising considering signs elsewhere of tariff front-running, whilst prices paid jumped to their highest since Jun 2022.

• ISM mfg: 50.3 (cons 50.8) in February after 50.9 in Jan.
• Prices paid: 62.4 (cons 56.0, 7 responses vs 59 for the headline index) after 54.9 - highest prices paid since Jun 2022 having increased since Nov (when Trump won the presidential election).
• New orders: 48.6 (cons 54.6, 3 responses) after 56.0 – lowest new orders since Oct 2024
• Employment: 47.6 (cons 50.1, 3 responses) after 50.3 - back meaningfully below 50 after what had been its highest since May and before that Sep 2023.

 A more limited move in Europe post US Data, while US Price Paid came way above expectation, Manufacturing, Orders and Employment components missed expectations, helping Bund jump 15 ticks, but well within traded ranges.

• Treasuries reverse course, extending session highs after latest round of data: ISM Prices Paid surge while Mfg, Orders and Employment figures lower than expected:
• June'25 10Y trades 111-07.5 (+4.5), just below initial technical resistance at 111-09.5 (High Feb 28) followed by 111-13 (High Dec 10).
• Curves mixed but leaning flatter with bonds leading the post data charge, 2s10s -2.031at 19.492, 5s30s +.188 at 46.954, 10Y yield taps 4.2024 low.
• Block buy +15,000 SFRZ6 96.43, buy through 96.425 post time offer at 1001:46ET
• Stocks trade weaker post data but draw dip buying, SPX eminis -12.0 at 5951.25.
• Bbg US$ index -7.63 at 1290.49