Risk-Off Sentiment Continues

Treasury yields decline in a relatively quiet rates session. Treasury yields declined 1-4 bps across the curve today, extending Friday’s 7 bp drop.The move was gradual and came without a clear catalyst, though record demand at a $69B auction of 2-year Treasurys contributed. Equities generally sold-off in the risk-off session as markets await Nvidia’s earnings report (Wednesday), with the NASDAQ and S&P 500 down 1.21% and 0.50%, respectively. Meanwhile, President Trump stole headlines after commenting on impending tariffs and withdrawing US criticism of Russia’s invasion of Ukraine, as he attempts to make a deal to end the war.

President Trump says that tariffs on Canada and Mexico are on schedule. 25% tariffs on Mexico and Canada continue to be “on time” and “moving along very rapidly,” according to President Trump. The levies were initially delayed until March 4th after the two nations increased border protection measures, appeasing Trump. However, shortly after Trump commented, an anonymous US official backtracked and said that these tariffs are still to be determined. The official then confirmed that separate reciprocal tariffs (on all countries) will take effect in April. Trump noted confidence in the strategy, saying, “If somebody charges us, we charge them. It’s very simple… it’ll be very good for our country. Our country will be extremely liquid and rich again.”