Canada Wholesale Trade Preview Canada Wholesale Trade Preview: Analysts expect wholesale shipments, due Tuesday, to rise 0.5% in February (median -0.5%) after the 3.1% plunge in January. Forecast risk is all over the place given the bounce in retail shipments and plunge in manufacturing shipments during February. An as expected bounce would track expectations that the impact of the oil shock was front loaded in Q1. The 2.5% drop in February manufacturing shipments alongside the 1.3% gain in February retail sales informs our wholesale projection. Analysts are giving more weight to the retail sales gain given that the manufacturing drop was due to temporary factors in the vehicle production industry.
Treasury Action: long-end underperformance Treasury Action: long-end underperformance has been the rule today, though the rising tide on stocks is lifting all boats along the curve. The 2-year yield has backed up from 0.5040% session lows to clear 0.5320%, the 5-year rose from 1.290% to 1.334%, while the 10-year bounced from 1.853% to probe 1.90% and the 30-year ramped up from 2.5090% lows to 2.569%. That saw the 2s-10s spread widen 2 basis points from +135 bp to +137 bp, while the 5s-30s spread stretched 1.5 basis points from +122 bp to +123.5 bp. Swings on stocks have been amplified by China as tighter margin and looser short-selling rules on Friday were contrasted by rate cuts today - setting up the "V" shaped move.
Euro$ interest rate futures: a bulk purchase of June 2015s Euro$ interest rate futures: a bulk purchase of June 2015s was spotted at 99.69 today to the tune of 60k with double that reportedly bid as well. Sources say that some 200k in June euro$s were sold from 99.645-99.595 back on March 19 (after last FOMC) and this may be short-covering on that trade. The June contract is a half-tick lower at 99.69 presently and the deferreds remain under pressure, some 0.5-5.0 ticks lower out the back.