Daily Flows

• The yield curve remains inverted at the short end, while steepening from the mid to long end.
• This reflects market expectations of imminent monetary easing, but also signals concerns over higher long-term inflation or stronger long-term growth.
• The current 3-10 year spread is +66, indicating a moderately steep curve with near-term uncertainty.

U.S. Retail Sales Rebound After Tough January

• US retail sales rose 0.2% m/m in February, recovering from a 1.2% decline in January, as harsh weather had previously weighed on spending.
• Despite the February increase, retail sales were flat over January-February, compared to a 0.3% rise in Q4 2024, signalling soft underlying momentum.
• Shorter-dated US government bond yields rose, with the 2-year Treasury yield up 3bps to 4.05%, as the stronger control group data exceeded market expectations.
• The US 10-year Treasury yield edged down by 1bp to 4.30%, as markets weighed the retail sales rebound against broader economic uncertainties.