Weak Data Continues…

Daily Updates:

• Yesterday, a slew of economic readings in the US came in lower than expected:

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1. The Institute for Supply Management’s (ISM) Manufacturing Index fell by 1.3 points in March to 49. That meant US factory activity contracted, after two months of expansionary readings. Additionally, the Prices Index, which tracks changes in input prices, surged by 7 points to 69.4, the highest since June 2022. The report also showed a 3.5 point increase in factory inventories in March, suggesting a rush from firms to increase imports ahead of further tariffs promised by President Trump.

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2. S&P Global’s US PMI reading for March also fell from 52.7 in February down to 50.2 in March, only just above the value indicating an expansion too. According to that report, “tariffs were the most cited cause of factory input costs rising in March, and at a rate not seen since mid-2022 during the pandemic-related supply shock”. 

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3. US job openings fell in February to 7.568M, against an expected 7.66M new positions for the month. This was lower than the January figure which was revised upwards by 22,000 jobs to 7.762M. Layoffs were generally subdued with the most layoffs in the retail sector (67,000) and 18,000 in the federal government, however both the hiring rates and quits rate remained the same.

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• Despite those weaker readings, US equities ended yesterday higher than their opening: the S&P 500 and Nasdaq-100 closed +0.38% and +0.82%, respectively, as market uncertainty dominates the narrative ahead of the President’s afternoon tariff announcement in Washington. 
• Options markets for US treasuries are suggesting that traders expect a continued rally in treasuries ahead of the “Liberation Day” tariffs: the 1-month tenor 25-delta put-call skew ratio for the 10Y, 5Y and 2Y  treasury notes are at their highest levels towards calls since August 2024. That suggests a strong willingness amongst traders to pay a premium for a further upside in treasuries and a sign of worry that tariffs will slow down the economy more than they will increase inflation. 

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• Crypto spot prices are generally flat on the day so far. Amongst the majors, BTC and XRP are higher, whilst ETH and SOL trade lower. ETH’s term structure still remains inverted, though front-end volatility levels have dropped off slightly and BTC’s term structure maintains its flat shape from yesterday. 

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• Crypto exchange Bybit will delist its NFT Marketplace, Inscription Marketplace, and IDO product pages on April 8, 2025, as part of efforts to streamline its Web3 offerings.
• BlackRock has been approved by the FCA to offer crypto services in the UK. This means they can roll out their latest iShares Bitcoin ETP as a UK entity, following its recent listing, last week on Euronext in Paris and Amsterdam.
• Stablecoin issuer Circle has filed for an IPO in the US, submitting its S-1 registration with the SEC on April 1 and targeting a listing on the NYSE under the ticker CRCL. With JPMorgan Chase and Citigroup as lead underwriters, the USDC issuer is reportedly aiming for a valuation of up to $5 billion.

This Week’s Calendar:

Charts of the Day: