US STOCKS: Trade-Related Headlines Temper Support

Wednesday's Europe rates/bond options flow included:

• ERJ5 97.75/97.68ps sold at 1 in 8k
• ERM5 97.9375/98.00cs, bought for 2 in 10k
• ERM5 98.0625/98.12cs, bought for half in 3k
• ERZ5 97.875/97.625/97.375 put fly, paper pays 4.75-5 on 16k
• SFIU5 96.00/96.65/96.80 1x3x2 call fly 6K sold at 8.5

• BoC officials expressed caution about further interest-rate moves when they decided to lower them for a seventh consecutive meeting on March 12, according to minutes published Wednesday, saying it could take time to figure out whether U.S. tariffs will slow economic growth more than they boost inflation.
• Governing Council members "noted it could take time for these opposing effects to materialize," the Summary of Deliberations showed. Providing forward guidance on interest rates didn't make sense and officials "agreed to proceed carefully with further changes to monetary policy."
• Some Bank officials argued for holding rates earlier this month until more information emerged.
• BoC-dated OIS has priced in greater likelihood of another 25bp cut next month although it's still deemed less likely than holding, with 8.5bp vs 6.5bp early today. 

White House Press Secretary Karoline Leavitt is shortly due to brief reporters from the White House. LIVESTREAM

• The presser comes with the Trump administration in damage control as the scandal over the leaked Signal chat enters its third day. President Trump yesterday threw his support behind National Security Advisor Mike Waltz and Defense Secretary Pete Hegseth. Expect more of the same from Leavitt as the administration looks to ride out the news cycle.
• Despite White House efforts, the story is likely to run through the week. Axios reports that, according to social media engagement data, the story “has quickly become the top news story of the year worldwide”.
• Leavitt will also face questions over the state of Russia-Ukraine ceasefire negotiations after Trump said yesterday it is possible that Russian President Vladimir Putin is “dragging his feet” on a ceasefire deal.
• There will also be questions on April 2 reciprocal tariffs, with Trump continuing to provide mixed messages over the scope and rate of tariffs and any exemptions that will be offered to trade partners.
• Bloomberg reported this afternoon that auto tariffs could be announced as soon as today.