FED: Trump Continues To Attack Powell And Fed More Broadly

Tuesday's Europe rates/bond options flow included:

• ERJ5 97.87/97.9375cs, bought for 1.25 in 12k
• ERK5 97.6875/97.5625/97.4375p fly, bought for 1.75 in 6k
• ERM5 98.125/98.375 call spread vs 97.625 puts, 10K given at 1.75 vs. 97.785-97.79. Market contacts point to an unwind of an existing position
• 0RJ5 98.00/98.12cs vs 97.5625p, bought the cs for 1 in 5k

• Date $MM Issuer (Priced *, Launch #)
• 03/18 $3.5B #Volkswagen AM $550M 2Y +93, $300M 2Y SOFR+106, $1.1B 3Y +108, $500M 5Y +132, $500M 7Y +147, $550M 10Y +155
• 03/18 $3.5B #ING $750M 4NC3 +85, $750M 4NC3 SOFR+101, $1B 6NC5 +100, $1B 11NC10 +125
• 03/18 $2B *ADB 10Y SOFR+57
• 03/18 $1.1B #Xcel Energy $350M 3Y +85, $750M 10Y +135
• 03/18 $1B #Bangkok Bank 15NC10 +178
• 03/18 $850M #PacifiCorp 30NC5.25 7.375%
• 03/18 $562M #Chile Electricity 10.6Y +160
• 03/18 $500M #CNH Industrial Capital 3Y +87
• 03/18 $Benchmark Ford Motor 3Y +190, 3Y SOFR+203, 7Y +235
• 03/18 $Benchmark NatWest 3Y +78, 3Y SOFR+95, 5Y +95, 5Y SOFR+119
• 03/18 $Benchmark LG Energy 3Y, 5Y, 10Y investor calls

European curves steepened Tuesday, with short-end German instruments outperforming.

• Core FI fell to the session's weakest levels in morning trade as the two day rally in equities appeared to extend into a third.
• But the equity rally faded in the afternoon, with oil prices also fading, helping core FI fully recover (though also reversing earlier periphery / semi-core EGB spread tightening).
• The Bundestag approved the much anticipated German fiscal reforms including a loosening of the debt brake, though this appeared to have been well-anticipated as Bunds saw only limited and temporary weakness following the news.
• Comments by ECB's Rehn in an MNI Connect event suggested that there is a high bar to him not voting for a cut in April (markets still have it better than 50/50 implied). In data, the Eurozone trade surplus was slightly larger than expected in January, while German ZEW jumped to the highest in 3 years (corresponding to the DAX equity rally and above fiscal developments).
• The German curve twist steepened on the day, with yields down through the 10Y segment, while the UK's bear flattened through the 10Y segment (though 2s30s was higher). Periphery/semi-core spreads closed a little wider.
• We get final February Eurozone inflation data Wednesday, but the week's main events in Europe are in the UK Thursday with labour market data and the BoE decision.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 1.3bps at 2.176%, 5-Yr is down 1.2bps at 2.46%, 10-Yr is down 0.8bps at 2.81%, and 30-Yr is up 0.5bps at 3.121%.
• UK: The 2-Yr yield is up 0.8bps at 4.201%, 5-Yr is up 0.7bps at 4.295%, 10-Yr is up 0.5bps at 4.643%, and 30-Yr is up 1.1bps at 5.229%.
• Italian BTP spread up 0.8bps at 110.8bps / French OAT up 0.9bps at 68.3bps