POWER: "*GERMAN POWER FOR DEC. 18 SETTLES AT EU 74.22 /MWH: EPEX AUCTION"-bbg

• Treasury futures extended the top end of the overnight range in the last 5 minutes, Dec'25 10Y tapped 112-24 before trading back to 112-23 (+6), 10y yield slips to 4.1173% low (-.0310).
• Treasuries last week challenged resistance at the 113-02 level, an area of congestion since Nov 5. This hurdle remains intact, however, a clear move above it would be a bullish signal and shift focus on resistance at 113-18+, the Oct 28 high. A break would also cancel a short-term bearish theme.
• The German 10Y Bund gained as well - but remains off overnight highs, Bbg US$ index firmer at 1217.70 (+1.42), stocks mildly higher (SPX eminis +19.75 at 6,775.00).

• Fed Funds implied rates are unchanged from Friday’s close, holding last week’s push to a close call for December’s FOMC meeting between another 25bp cut or pausing.
• A pause is now seen as slightly more likely, supported by multiple Fed speakers with patient rhetoric.
• Cumulative cuts from an assumed 3.88% effective: 11bp Dec, 21bp Jan, 31bp Mar, 38.5bp Apr and 53bp Jun.
• SOFR futures are +0.005-0.025, with increases led by 2027 contracts.
• It sees the terminal implied yield remain within recent ranges, at 3.10% (SFRH7) between 3.06-3.16% that has been defined primarily by labor data and a strong ISM services report.
• Today’s data is light – Empire manufacturing for Nov and a delayed construction spending report for Aug – with some Fedspeak updates possibly more important (noted a little earlier). Nonfarm payrolls for September looms large on Thursday even if it is now two months old. 

ERM6 97.8125/98.3125RR, bought the Call for 0.75 in 8k.