US TSYS: US Trade Policy Continues to Weigh Heavily on Sentiment
Apr-03 19:29
- Treasuries looked to finish broadly higher Thursday, little off midday highs as markets continue to react negatively to Pres Trump's reciprocal tariff announcement late Wednesday, SPX eminis index fell over 4.25%, the tech-heavy Nasdaq over 5.5%, the DJIA over 3.4%.
- Heavy risk-off support in rates saw June 10Y futures climb to 113-02 midmorning, shy of technical resistance of 113-05 (1.764 proj of the Jan 13 - Feb 7 - Feb 12 price swing), currently trade +1-06.5 at 112-22.5; 10Y yields fall below 4.0 briefly (3.9966% low), currently at 4.0455% after the bell.
- March's ISM Services report showed well below-expected activity measures, alongside a softer-than-expected reading on prices. This wasn't an outright negative report, with an expansionary overall reading and mixed comments about the impact of government policy shifts including tariffs, but it certainly casts a more cautious light on the services sector than February's solid ISM data.
- Despite a rise in projected rate cuts in 2025 rising to three 25bp moves by late October, Fed Governor Jefferson (permanent voter) says there is no need to hurry to make rate adjustments, repeating a stance from Feb 19 when he last spoke on mon pol. "The current policy stance is well positioned to deal with the risks and uncertainties that we face in pursuing both sides of our dual mandate."
- US pessimism reverberated into global currency markets, with dollar indices sharply lower on the session. The ICE dollar index is off its worst levels, but is broadly consolidating a 1.75% decline on Thursday, currently trading around the 102.00 mark.
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US STOCKS: Late Session Rebound
Mar-04 19:10
- US stocks are making a recovery since midday, Nasdaq in the green as Tech sector of all places lead the bounce with Super Micro Computer Inc, Enphase Energy Inc and First Solar Inc all up 5.5-8.5% at the moment.
- DJIA down 266.35 points (-0.62%) at 42503.93
- S&P E-Mini Future down 15.5 points (-0.26%) at 5774.5
- Nasdaq up 104.5 points (0.6%) at 18144.75
EURGBP TECHS: Bear Threat Remains Present
Mar-04 19:00
- RES 4: 0.8378 High Feb 6 and a reversal trigger
- RES 3: 0.8361 50.0% retracement of the Jan 20 - Feb 3 bear leg
- RES 2: 0.8325 50-day EMA
- RES 1: 0.8306 High Feb 26 and a key short-term resistance
- PRICE: 0.8281 @ 16:28 GMT Mar 4
- SUP 1: 0.8241 Low Mar 3
- SUP 2: 0.8223 Low Dec 19 and a key support
- SUP 3: 0.8203 Low Mar 7 ‘22 and a lowest point of a multi-year range
- SUP 4: 0.8163 123.6% retracement of the Dec 19 - Jan 20 bull leg
EURGBP traded higher into the Tuesday close. A bearish condition remains intact following last week’s move lower. The cross has pierced a key support at 0.8248, the Feb 3 low. A clear breach of this level would strengthen the bearish condition and pave the way for 0.8223 , the Dec 19 low and the next key support. To the upside, initial firm resistance has been defined at 0.8306, the Feb 26 high. Clearance of this hurdle would suggest a possible base and a reversal.
PIPELINE: Corporate Bond Update: Mars Jumbo Issuance Chatter
Mar-04 18:51
- Market chatter in credit space is that Mars Inc, a family-owned, global leader in pet care, snacking and food, is looking to issue as much as $30B over as many as 8 tranches in the near term (possibly tomorrow after a conf call with investors today)
- The "jumbo" issuance is expected to help finance it's purchase of Kellanova, also a snacking/food related company for "$83.50 per share in cash, for a total consideration of $35.9B" back in August 2024.
- Estimates vary from $25B to $30B which would put it comfortably in the top ten largest corporate debt issuance on record.
