Weak data
March 4, 2025
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–ISM Mfg weak. 50.3 vs 50.7 expected. Prices hit a new recent high at 62.4. New Orders and Employment both sub-50 48.6 and 47.6.
–Buyer early: 40k TYK 112c for 43. Settled 56 vs TYM5 111-13 (new high for the move). Cash 10y yield closed at 4.18, down 4.7 bps on the day and below the 50% retracement of September’s (pre-FOMC) low of 3.62 to January 14 high of 4.794. Halfway around 4.21. The 5y joined 2s in a sub-4% yield, with fives ending at 3.991.
–Atlanta Fed GDPNow for Q1 down to -2.8% from -1.5%. Yes, part of it is import/export data but I believe uncertainty is taking a toll on growth.
–OPEC agrees to oil output increase. CLJ this morning at new recent low, down 0.60 on the day at 67.77, which is around $10/bbl lower than the high made in early January as yields also made new highs.
–Retail reports today and Thursday may provide clues on health of the US consumer. TGT and BBY today pre-open (both charts already indicate weakness). COST, M and KR Thursday.
–Marginal new lows in near SOFR calendars. SFRH5/H6 now -68.5, down just 0.25 (9572/9640.5). Both H5/M5 and M5/U5 three-month calendars are nearing -25, the former at -24.5 and the latter -22.5. Market is starting to price more aggressive easing by the Fed.
