BUNDS: The contract finds resistance at the 2.50% level

Prime Minister Sir Keir Starmer has said that he is "disappointed to see global tariffs" on steel and aluminum from US President Donald Trump. Speaking at prime minister's questions, Starmer says, 'We will take a pragmatic approach... we're negotiating an economic deal... we will keep all options on the table'. 

• In contrast to the EU, which imposed retaliatory countermeasures immediately following the US' imposition of its own tariffs, the UK has refrained from imposing its own trade levies in response to Trump's actions.
• As NYT notes, Starmer may view the potential of a trade deal with the US as a way to avoid future tariffs. Trump commended Starmer's efforts to avoid the imposition of tariffs on British exports during his late Feb White House visits, even though these exertions did not pay off in the short term.
• Starmer will also be looking to avoid confrontation with the US as he seeks to improve US-Ukraine relations and steer Washington towards ceasefire talks and an eventual deal that takes into account Ukrainian interests and ultimately ensures security guarantees for Kyiv.
• The lack of UK retaliation will be noted in Brussels and other EU capitals. Since coming to office in July, Starmer has sought to bolster post-Brexit ties with the EU. For some member states, the UK acting as a bridge between the US and EU could be seen as an economic threat over the medium term should the UK secure a trade deal. 

And a little more color on that lower than expected supercore print shown above.

• Core services excl OER & primary rents ('supercore'): 0.215% M/M after 0.757%. Latest 3mth av of 0.392%
• Core services excl all shelter: 0.26% M/M after 0.712%. Latest 3mth av of 0.408%
• Limited analyst estimates for ex OER & rents had averaged 0.36% M/M, ranging from 0.25 to 0.44

• Treasury futures rebound off lows - gap higher on lower than expected CPI inflation data for February. The Mar'25 10Y tapped 110-18.5 low before reversing course to 111-07 high. Decent two-way volumes as futures scale back again, trade 110-27 last (+0.0).
• Futures inside initial technical levels: resistance above at 111-25 (yesterday's high), support below at 110-12.5/110-00 (Low Mar 6 / High Feb 7).
• Tsy 10Y yield slipped to 4.2453% low, 4.2817% last, curves mildly steeper: 2s10s +.143 at 33.404.