US Futures Rebound Ahead Of Busy Data Calendar As New Record High Looms

It’s as if Monday’s modest dip never happened: S&P futures are trading are higher, surpassing Monday’s highs, with both Tech and small-caps outperforming, as investors keep a close eye on any potential market impact from the collapse of a major commuter bridge in Baltimore after it was rammed by a container ship. As of 8:00am ET, S&P futures were 0.4% higher, erasing Monday’s 0.3% drop, while Nasdaq futures gained 0.5%. Europe’s Estoxx 50 is similar, trading at multiyear high with utilities and financials outperforming. According to a JPM morning note, it is unclear if yesterday’s moves were tied to month-end/quarter-end rebalancing but generally those flows occur before the last day of the period. USD weakness continues as the yen just refused to drop no matter what; commodity performance is mixed with gold approaching ATHs and oil trading at a 5 month high. Today’s macro data calendar is busy with focus on Durable/Cap Goods, Home price indices, Consumer Confidence, and regional activity indicators (Dallas, Philly, and Richmond); we also get a $67BN 5Y bond auction; let’s see if it goes as smoothly as yesterday’s 2Y auction.

In premarket trading, both Mag 7 and Semis are higher (as usual) with TSLA +3.2%. USD weakness continues but commodity performance is mixed with gold approaching ATHs. Shares of Donald Trump’s social media startup surged around 20% in premarket trading after it completed a merger with Digital World Acquisition Corp. Tesla climbed 3%, set to extend gains for a second consecutive session. Italian newspaper Il Sole 24 Ore reports that officials at the country’s Industry Ministry contacted the company about potential production of electric trucks. Here are some other notable premarket movers:

Dada Nexus ADRs fall 9% after the delivery company reported an unexpected 4Q net loss.
Krispy Kreme jumps 15% after announcing that its doughnuts would be sold at McDonald’s restaurants across the US.
Reddit rises 5%, putting the stock on track to extend gains for a second day after the social media company rallied 30% on Monday.
Seagate climbs 4% as Morgan Stanley raises its recommendation on the computer hardware and storage company to overweight, predicting a period of “structurally stronger gross margins.”
Stoke Therapeutics soars 90% after the company said data from studies on its STK-001 treatment in Dravet syndrome showed clinically meaningful effects in seizure reduction.
Trump Media & Technology Group Corp gains 11% after completing a merger with Digital World Acquisition Corp.

As Bloomberg notes, concern about a disconnect between earnings expectations and share prices has grown this week. US durable goods and consumer confidence data are due today ahead of the government’s closely followed personal consumption expenditures price index on Friday when many markets will be closed for Easter holidays. Federal Reserve Chair Jerome Powell is also due to speak the same day.

For Vincent Juvyns, global market strategist at JPMorgan Asset Management, better visibility on the economy means that that focus is turning back to earnings going into the second quarter. “Markets are expensive, not too expensive, but it would be dangerous to bet on further upside without earnings driving it,” he said.

As has been the case for the past 18 months, bearish Morgan Stanley and JPMorgan strategists – Michael Wilson and Marko Kolanovic – were the latest to warn that lofty valuations will be hard to justify if they’re not accompanied by an acceleration in company profits. Or, as we said in Jan 2023, the rally won’t end until they finally throw in the towel and turn bullish. Meanwhile, the S&P 500 is up almost 10% this year on a combination of healthy US economic data, Fed rate-cut wagers and optimism about artificial intelligence.

Meanwhile, the Financial Times cited Chief Investment Officer Andrew Balls as saying Pimco is holding a smaller-than-usual position in US Treasuries and prefers the bonds of countries such as the UK and Canada. Pimco believes inflationary pressures may lead the Federal Reserve to cut interest rates more slowly than other major central banks, according to the report.

European stocks also rose, with Stoxx 600 gaining 0.4%, even as miners slumped after iron ore futures tumbled over deepening anxiety regarding Chinese demand. Consumer products and services also underperformed, while the travel and leisure and banking sectors lead the regional index. Among individual stock moves in Europe, A.P. Moller-Maersk A/S fell after the shipping giant said that it chartered a container vessel that hit the Francis Scott Key Bridge in Baltimore on Tuesday. Ocado Group Plc rose after sales at its online grocery business got a boost from price cuts, while BNP Paribas SA gained after Goldman Sachs Group Inc. upgraded the French bank to a buy rating thanks to a better operating backdrop. Here are the most notable European movers:

BNP Paribas jumps as much as 2.4% after Goldman upgrades the lender to buy from neutral, saying operating backdrop should improve over the coming years
Rubis gains as much as 4.2% after Oddo upgrades its recommendation on the energy company to outperform after a “surprise” stake purchase by Bollore
Santander rises as much as 1.4% after a Barclays upgrade to overweight on discounted valuation and most favorable EPS progression into 2025
Flutter rises as much as 4% as the casino operator’s strong year-to-date US trading and 2024 guidance impress analysts, while its 2023 results were in line
Lonza rises as much as 1.1% after Mirabaud Securities raised its recommendation to buy, saying a facility acquisition should enable it to meet 2028 margin guidance
Defense stocks extend Monday’s gains as JPMorgan says it sees potential for the sector to re-rate further as the region’s rearmament cycle continues
Asos jumps as much as 5.6% after the online retailer’s trading update showed progress on reducing inventory. Berenberg says Asos is delivering on its strategy
RAI Way rises to as much as 6.4% after a report that the Italian government may approve a decree to allow state TV operator Rai to drop below a 30% stake
Mobico drops as much as 6.7% after RBC lowers its rating to sector perform, snapping the stock’s clean sweep of positive analyst ratings
Atos falls as much as 10% after it reported entering a conciliation procedure that will give it time to reach a debt restructuring deal with banks and creditors
Auto Trader falls as much as 5.5% as JPMorgan places the digital marketplace for vehicles on negative catalyst watch, citing “further legs” to a recent underperformance
Baloise falls as much as 2.4% after the Swiss insurer reported a miss on full-year net profit due to weakness in its life insurance business

Earlier in the session,  Asian stocks were mixed, as Korean stocks rallied and Hong Kong equities erased earlier gains, with the regional benchmark poised for a second quarterly advance. The MSCI Asia Pacific Index was little changed, erasing a gain of as much as 0.5%. South Korea’s Kospi headed for its highest close in almost two years as foreign investors bought local chip stocks following US memory maker Micron’s surge.

Stocks in Hong Kong and mainland China erased earlier gains. Elsewhere, Japanese equities fluctuated as the weak yen supported exporters but prompted warnings from officials. Australian and New Zealand stocks declined. Australia’s ASX 200 declined as tech losses clouded over the outperformance in the energy sector, while weaker Consumer Confidence added to the glum mood.

In FX, a gauge of the dollar fell for the second straight session and front-end Treasuries rose ahead of a string of US economic data. The Bloomberg Dollar Spot Index dropped 0.1%, while front-end Treasuries rose; two-year yields dropped 4bps to 4.59%

GBP/USD rose as much as 0.2% to 1.2664, after the BOE’s Mann said markets are pricing in “too many cuts” for this year; Traders are betting the Bank of England will likely start rate cuts before the Fed or ECB
USD/CNY rose as much as 0.1% to 7.2203, as China’s central bank boosted its support for the currency by the most since January; New Zealand dollar, Swedish krona and Australian dollar led G-10 gains on bolstered risk sentiment
EUR/USD ticked up as much as 0.2% to 1.0856 on the back of broad dollar weakness; ECB’s Muller said by June there might be “enough confidence” to start easing policy and hedge funds are betting the euro will weaken, according to options pricing
USD/JPY was flat at 151.35 after Japan’s Finance Minister Shunichi Suzuki said Tuesday the government will take appropriate steps against excessive currency moves, without ruling out any measures.  Dollar-yen is likely to stay above 150, according to Mitul Kotecha, head of foreign exchange and emerging market macro strategy Asia at Barclays Bank Plc in Singapore. “Intervention will really depend on when we get through big levels,” he said on Bloomberg Television. “You’d imagine that once we start breaking through big levels such as 155 or 160, for instance, you’d see more of an aggressive stance from the Japanese authorities.”
The offshore yuan strengthened for a second day after China’s central bank reinforced its support for the currency.

In rates, treasuries were richer by up to 2bp across long-end of the curve, led by bigger gains in gilts as traders look past comments from BOE’s Mann who said markets are pricing in too many interest-rate cuts this year.  10-year TSY yields are richer by around 1.8bp on the day at 4.23% with gilts outperforming by 3bp in the sector; long-end outperforms slightly over the session, with 5s30s near lows of the day and flatter by 1bp vs Monday’s close. The US session has packed data slate headed by durable goods orders and consumer confidence. Auction cycle continues with $67 billion 5-year note sale. The holiday-accelerated auction cycle resumes with $67b 5-year note sale at 1pm, follows 0.5bp tail for 2-year sale on Monday. This week’s sales conclude with $43b 7-year Wednesday

In commodities, oil was little changed after the biggest gain in a week, with OPEC+ set to affirm its policy of production cuts amid tensions in the Middle East and Russia. Gold hovered near a record high.

Bitcoin holds above $71k, with Ethereum now back above $3.5k. On Monday, spot bitcoin ETFs registered inflows totalling USD 15.4mln on Monday, ending a five-day run of outflows.

Looking at today’s calendar, the US economic schedule includes March Philadelphia Fed non-manufacturing activity and February durable goods orders (8:30am), January FHFA house price index, S&P CoreLogic home prices (9am), March consumer confidence and Richmond Fed manufacturing index (10am) and March Dallas Fed services activity (10:30am); no Fed speakers scheduled.

Market Snapshot

S&P 500 futures up 0.2% to 5,290.50
STOXX Europe 600 down 0.2% to 509.03
MXAP up 0.3% to 176.92
MXAPJ up 0.3% to 535.99
Nikkei little changed at 40,398.03
Topix up 0.1% to 2,780.80
Hang Seng Index up 0.9% to 16,618.32
Shanghai Composite up 0.2% to 3,031.48
Sensex down 0.3% to 72,584.51
Australia S&P/ASX 200 down 0.4% to 7,780.23
Kospi up 0.7% to 2,757.09
German 10Y yield little changed at 2.37%
Euro up 0.1% to $1.0849
Brent Futures down 0.1% to $86.64/bbl
Gold spot up 0.3% to $2,178.34
US Dollar Index little changed at 104.14

Top Overnight News

Japan’s BOJ isn’t as dovish as markets think as the central bank adopts a “data dependent” outlook rather than one that’s committed to sustaining policy accommodation regardless of economic conditions. RTRS
China’s central bank reinforced its support for the under-pressure yuan by strengthening its daily reference rate for the managed currency by the most since January. BBG
Some US executives in Beijing for a business summit are rejigging their schedules after being invited to meet tomorrow with a top Chinese leader – widely expected to be Xi Jinping. Tim Cook described China as “vibrant and so dynamic,” and pledged fresh investment in applied research. BBG
The US faces a Liz Truss-style market shock if the government ignores the country’s ballooning federal debt, the head of Congress’s independent fiscal watchdog has warned. Phillip Swagel, director of the Congressional Budget Office, said the mounting US fiscal burden was on an “unprecedented” trajectory, risking a crisis of the kind that sparked a run on the pound and the collapse of Truss’s government in the UK in 2022. FT
US gas prices are set to hit the highest level in two years just ahead of the summer driving season, creating a fresh headwind for the consumer. BBG
The Francis Scott Key Bridge in Baltimore collapsed after a container vessel rammed into it early Tuesday, sending vehicles plunging into the water. The disaster will probably cause chaos, both for shipping at one of the busiest ports on the US East Coast and on the roads. Rescuers are searching for at least seven people believed to be in the water. BBG
The world faces a looming “retirement crisis” that requires a rethink of pensions and working patterns as medical breakthroughs boost longevity, BlackRock chief executive Larry Fink warned on Tuesday in his closely watched annual letter to chief executives and investors. FT
Bond fund giant Pimco is holding a smaller than usual position in US Treasuries and prefers the bonds of countries such as the UK and Canada, as it believes inflationary pressures may lead the Federal Reserve to cut interest rates more slowly than other major central banks. FT
Adam Neumann, the former chief executive and co-founder of WeWork, recently submitted an offer to buy the bankrupt co-working company for more than $500 million, according to people familiar with the matter. WSJ

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were choppy after a similarly subdued handover from Wall St owing to early tech headwinds and ahead of month-end. ASX 200 declined as tech losses clouded over the outperformance in the energy sector, while weaker Consumer Confidence added to the glum mood. Nikkei 225 swung between gains and losses amid an indecisive currency and inconclusive Services PPI data. Hang Seng and Shanghai Comp. saw two-way price action with earnings releases in focus, while the mainland failed to sustain early optimism from the PBoC’s more forceful liquidity operation.

Top Asian News

Chinese Vice President Han said it is important to promote economic globalisation and smooth global industrial and supply chains, while they will accelerate the development of new productive forces and provide stability and security for the global economy.
Japanese Finance Minister Suzuki said it is important for currencies to move in a stable manner reflecting fundamentals and rapid FX moves are undesirable, while he won’t rule out any steps to respond to disorderly FX moves.
Japan’s Business Lobby Chief says USD/JPY beyond 150.00 is excessive, according to Kyodo (USD/JPY currently at 151.32).
China’s Deputy Head FX regulator says volatility in FDI inflows is normal.
Shipments of smartphones within China -31.3% Y/Y at 14mln (prev. 29.5mln M/M) handsets in Feb, via CAICT.
China has initiated WTO dispute settlement proceedings against the US over interests in the EV industry.

European equities, Stoxx600 (+0.1%), began the session without direction, though caught a bid alongside strength in US equity futures; however, the FTSE 100 (-0.1%) lags, given the underperformance in the Basic Resources sector. European sectors hold a negative tilt; Banks is found at the top of the pile, propped up by BNP Paribas (+1.9%), which benefits from a broker upgrade. Basic Resources is hampered by broader weakness in base metals. US equity futures (ES +0.3%, NQ +0.4%, RTY +0.4%) are entirely in the green, attempting to pare back some of the weakness seen in the prior session.

Top European News

BoE’s Mann says she switched to an unchanged rate vote based on consumer behaviour, labour demand & supply and the financial market curve. Can hold the bank rate for quite some time. Markets are perhaps a bit too complacent when it comes to how long the BoE can hold rates. Markets are pricing in too many rate cuts. In some ways does not have to cut because the market already is. Avoids giving a prediction on the number of 2024 rate cuts.
ECB’s Muller says data can confirm inflation trend for ECB’s June meeting, ECB is closer to the point of cutting rates.
UK MPs warned that pension rules risk ‘finishing off’ the remaining defined-benefit plans and noted concerns that the new funding regime would require schemes to de-risk inappropriately, according to FT.
Kantar UK Supermarket update (Mar): Grocery price inflation eased to 4.5% over the four weeks to 17 March, the lowest level since February 2022. Take-home grocery sales rose by 4.6% over the four weeks to 17 March, with an early Easter boosting sales of seasonal treats in the first three months of 2024.
Sweden’s NIER sees 2024 GDP +0.8% (prev. 1.0%), sees 2024 headline inflation 1.9% (prev. 1.7%), End-2024 repo rate 3.00% (prev. 3.30%); Expects Riksbank to start cutting rates in June.

FX

DXY is marginally softer but holding just above the 104 mark with not much in the way of fresh newsflow. If 104.00 is breached, Friday’s low sits at 103.92.
EUR is trivially firmer vs. the USD with a high print of 1.0853 after moving above 200 and 50DMAs at 1.0836 and 1.0839 respectively.
GBP is edging higher vs. the USD but yet to test last Friday’s high at 1.2675 or 50DMA at 1.2679. Comments from BoE’s Mann reasserts her hawkish position on the MPC despite voting unchanged last week.
JPY is a touch firmer but the USD but only marginally so as Japanese officials continue to try and defend the Yen.
Antipodeans are both a touch firmer vs. the USD but NZD more so; newsflow very quiet. AUD/USD currently eyeing its 50 and 200DMAs which both sit at 0.6550.
PBoC set USD/CNY mid-point at 7.0943 vs exp. 7.2037 (prev. 7.0996).

Fixed Income

USTs are incrementally firmer but with action more contained than in Europe ahead of a handful of data points before the 5yr auction. No concession ahead of the auction yet, and within a 6 tick range between Monday’s 110-15 to 110-30 parameters.
Bunds are modestly firmer as EGBs unwind some of the slight pressure seen on Monday, sparked by Bostic/2yr supply concession; usual hawkish-leaning rhetoric from ECB’s Muller and a less-downbeat German GfK spurred no real reaction; currently higher by around 22 ticks at 132.84.
Gilts initially conformed to the broader positive sentiment in the fixed complex, subsequent hawkish commentary from BoE’s Mann did little to cap the upside. The outspoken hawk mentioned that rates can be held at the current level for “quite some time”; Gilts at a fresh 99.70 peak, seemingly driven by Mann’s remarks underscoring her shift to be in-line with the majority but on the hawkish end of this. Little reaction seen following the UK auction.
UK sell GBP 3bln 4.50% 2028 Gilt: b/c 3.48x (prev. 3.34x), average yield 3.928% (prev. 4.095%) & tail 0.3bps (prev. 0.4bps)

Commodities

Crude price action has been contained and near recent highs despite a quiet European morning, following several geopolitical headlines over the weekend; Brent currently around USD 86.60/bbl.
Relatively uneventful trade in precious metals thus far in European hours with the Dollar contained and news flow light in a holiday-thinned week ahead of month end. XAU caught a bid in recent trade and now at session highs around USD 2190/oz.
Base metals are mixed and within confined ranges on Monday amid a lack of macro narrative to drive price action.
Head of Venezuela’s opposition coalition said it was not possible to register a candidate for the presidential election.
Brazilian miner Vale said it was selected by the US government to begin negotiations for financing related to an iron ore briquette plant and it will negotiate for an award of up to USD 282.9mln for the US project.
Japan’s Eneos says shut Kawasaki No.3 CDU (77k BPD) for maintenance on March 22.

Geopolitics: Middle East

US Secretary of State Blinken underscored to Israel’s Defence Minister Gallant that alternatives exist to a ground invasion of Rafah that would both better ensure Israel’s security and protect Palestinian civilians, while it was also reported that White House’s Sullivan had a constructive discussion with Israel’s Gallant.
“Israeli sources: The Israeli delegation leaves Doha after Hamas rejected the US proposal approved by Israel”, according to Sky News Arabia. Subsequent reports said, Gaza ceasefire and hostage release talks continue and Mossad officials remain in Doha, according to Reuters sources; Mossad team is returning to Israel for consultations on developments

Geopolitics: Other

New Zealand Foreign Minister Peters confirmed that New Zealand’s concerns about cyber activity have been conveyed directly to the Chinese government and he directed senior foreign ministry officials to speak to the Chinese ambassador, according to Reuters.

US Event Calendar

08:30: Feb. Durable Goods Orders, est. 1.0%, prior -6.2%
Feb. Durables-Less Transportation, est. 0.4%, prior -0.4%
Feb. Cap Goods Orders Nondef Ex Air, est. 0.1%, prior 0%
Feb. Cap Goods Ship Nondef Ex Air, est. 0.1%, prior 0.9%

08:30: March Philadelphia Fed Non-Manufactu, prior -8.8
09:00: Jan. S&P/CS 20 City MoM SA, est. 0.20%, prior 0.21%
Jan. S&P CS Composite-20 YoY, est. 6.60%, prior 6.13%
Jan. FHFA House Price Index MoM, est. 0.3%, prior 0.1%

10:00: March Conf. Board Consumer Confidenc, est. 107.0, prior 106.7
March Conf. Board Present Situation, prior 147.2
March Conf. Board Expectations, prior 79.8

10:00: March Richmond Fed Index, est. -5, prior -5
10:30: March Dallas Fed Services Activity, prior -3.9

DB’s Jim Reid concludes the overnight wrap

I’ll be off skiing on Friday, although with the forecast and recent lack of snow it may as well be water skiing. It felt like the market had left for their hols early yesterday as we started what is an Easter shortened week. The most interesting theme of the day was a steady but notable global rates sell-off that, for example, wiped out nearly half of last week’s -10.8bps fall in 10yr UST yields. There was no obvious catalyst so maybe thin trading played a part? As we’ll see below, there was a little hawkishness in the Fed speak but the moves were steady through the day rather than directly related to any headlines.

10yr US yields closed +4.7bps higher at 4.25% with 2yrs +3.6bps at 4.63%. Markets also trimmed the amount of Fed rate cuts they are expecting this year by -4.7bps to 80bps. We also saw the expected probability of a June cut fall to 79%, down from nearly 86% at the peak last week. It was real yields that drove the sell-off, with the 10yr real yield up +5.9bps after falling for the previous four sessions. The yield increases levelled off following a decent 2yr auction. Bonds totaling $66bn were issued 0.5bps above the pre-sale yield, but with the indirect bidder share reaching its highest level since June. We still have $110bn in Treasury supply to come this week, with a record $67bn 5yr auction later today, so something to keep an eye on.

The rates and yield sell-off was seen across the board with the amount of ECB cuts priced by December coming down -6.1bps to 88bps, with 2yr and 10yr German bund yields climbing +5.6bps and +4.9bps, respectively. The sell-off was marginally larger for 10yr OATs (+5.0bps) and Gilts (+6.0bps).

There was some Fed speak of note with a little caution expressed regarding expectations of Fed cuts. Atlanta Fed President Bostic repeated weekend remarks that he now expected only one rate cut this year (versus two before), suggesting the Fed could be patient if the economy was holding up. Meanwhile, Chicago Fed President Goolsbee said he continued to see three rate cuts in 2024 but highlighted the need to see housing inflation moderate more. And Fed Governor Cook noted that “fully restoring price stability may take a cautious approach to easing monetary policy”. While being mostly consistent with Powell’s narrative last week, these comments underlined the upward narrowing of end-2024 rate expectations we saw in the FOMC dot plot last week (even as the median dot was unchanged at three cuts).

We also heard from a number of ECB officials over in Europe, including the ECB’s Panetta, a known dove, who remarked “ EU inflation [was] quickly falling towards the 2% target”, with the inflation decline allowing “for possible cut in rates.” We also heard from the ECB’s Chief Economist Lane, who reiterated that “we’re seeing good progress on inflation” and was “confident wage normalisation process is on track.” Although relatively dovish, these comments did nothing to suggest that an ECB rate cut could come any earlier than June, which appears to be the baseline based on other recent ECB commentary.

Equity markets had a quiet session with the S&P 500 starting the week on the back foot (-0.31%), and with similar moves in the Dow Jones (-0.41%) and the Nasdaq (-0.27%). The last two sessions have seen the narrowest trading ranges for the S&P 500 since early February, with only one of its 24 industry groups seeing a move of more than 1% yesterday (-1.06% for software & services).

The Magnificent Seven (-0.22%) outperformed marginally even as it was reported that Apple (-0.83%), Alphabet (-0.46%) and Meta (-1.29%) could be at risk of significant fines in the EU amid a new investigation into the firms’ compliance with the Digital Markets Act. The Act looks to restrict the dominance of the biggest online platforms and came into effect earlier this month. Nvidia (+0.76%) managed to secure its sixth day of consecutive gains but the Philadelphia Semiconductor Index fell -0.34% amid a Financial Times report that China had adopted new guidance to limit the use of US-made semiconductors, including those produced by Intel (-1.74%) and AMD (-0.57%), in government computers. Over in Europe, the STOXX 600 (+0.04%) moved sideways, while the German Dax (+0.30%) hit a fresh all-time high.

Credit markets saw a mixed day, with high-yield spreads narrowing in Europe but US IG (+2bps) and high-yield (+4bps) spreads widening modestly after reaching two-year lows last Thursday. On this topic, my credit strategy team have revised their spread targets for US and Europe tighter. You can read more here.

Asian equity markets are fairly quiet this morning with the KOSPI (+0.83%) leading gains powered by chipmaking stocks. TheHang Seng (+0.30%) has bounced after the lunch break but the Shanghai Comp (-0.58%) is struggling after a second day of a stronger Yuan fix. 10yr US yields are a basis point lower with S&P (+0.16%) and Nasdaq (+0.19%) futures both higher.

The limited US data releases yesterday were slightly on the softer side. The Dallas Fed manufacturing index for March came in at -14.4 (vs -10.0 expected), down from -11.3 in February. New home sales were unexpectedly down in February, falling from 664k to 662k (vs 677k expected). On the other hand, the Chicago Fed national activity index improved to 0.05 (vs -0.34 expected), continuing to oscillate around trend levels.

Now to the day ahead. In terms of data, we have the US March Conference Board consumer confidence, the Richmond Fed manufacturing index and business conditions, the Philadelphia Fed non-manufacturing activity, the Dallas Fed services activity, the February durable goods orders and the January FHFA house price index. Outside the US, we have Germany GfK consumer confidence. Lastly, we have a record $67bn US 5yr notes auction.