FICC Strategy Reports

Into the start: Risk recovering somewhat into the open. Gauges of European bank stocks are also in the green.

Into the start: Anxious start to the week. UBS shares were down by as much as 16% at one point, but have since bounced aggressively.

Into the start: CS shares rise by record levels in pre-market trading after an announcement last night that it had tapped SNB liquidity.

Into the start: We made it through a day without a bank failing. Importantly, no major signs of deposit outflows were reported yesterday.

Into the start: Markets responding to weekend announcements made by the FDIC, US Treasury and Federal Reserve.

In the US: For Powell today, I suspect markets will want some form of validation and/or endorsement of the shift higher in Fed terminal over the past month.

Into the start of the week: We’re seeing some signs of weakness in commodities that’s migrating into FX.

Into the start: Risk assets trade firmer overnight, while North American stocks look poised to open higher this morning.

Into the start: US nominal yields probing fresh highs for the year. That appears to be bleeding into other core rates markets as well.

In the US: a.) ICYMI – the WSJ reports that the US Energy dept has revised its assessment and now sees a lab leak as the most likely origin of the Covid-19 pandemic. Meanwhile, NSA Sullivan says that China still hasn’t taken a final decision on providing Russia with aid. b.) Yellen says that she expects to see a readjustment of lower housing rentals to further drive inflation lower this year.

Into the start: Equity markets are on the defensive. The USD is firmer against the EUR and JPY. Core rates are also soft with yields up across most of the developed markets. CAD rates are underperforming ahead of the CPI print – reflecting some signs of concern (notably in the reds) as well as ‘spillover’ effects from European PMIs.

Into the start: The bifurcation in risk markets continues. European/UK markets probe fresh highs while NA equity futures suggests stocks on this side of the pond will open in the red.

Into the start: Ahead of Powell, USD 1y1y OIS is now at 381bps, up from 342 bps late last week.

Into the start: Ahead of key central bank decisions this week, risk markets are off to a rocky start.

Into the start: 10-year JGB yields are now at 47.8bps from 37.8bps earlier this week.

Into the start: Reminder that China is out this week for the lunar new year holiday.