MNI ASIA MARKETS ANALYSIS: US Gov Shutdown Set To End Shortly

MNI (NEW YORK) -

HIGHLIGHTS:

• Treasury Futures Flat, Cash Bull Flatter As Post-US Government Shutdown Data Deluge Beckons
• Intraday Dollar Reversal Lower Seed GBP Regain Ground
• Crude Falls Amid Oversupply Concerns, Precious Metals Rally

US TSYS: Futures Flat, Cash Bull Flatter As Post-Shutdown Data Deluge Beckons

Cash Treasuries caught up with Tuesday's futures rally in the return to cash trade Wednesday, with TY futures hovering around the week's best levels.

• The curve bull flattened on the day, with Tuesday's poor weekly ADP data continuing to reverberate as we await "official" data following the conclusion of the government shutdown.
• The 10Y Note auction brought a tail (0.6bp) for a second consecutive month, but Treasuries were little moved in the aftermath. The Refunding week concludes with the 30Y auction Thursday.
• Atlanta Fed's Bostic announced his retirement at the end of his term in February 2026, and delivered a speech showing support for holding rates until there were clearer signs that inflation wasn't going to be a threat. NY's Williams repeated previous comments on Fed balance sheet policy, while Tsy Sec Bessent effectively recapped the conclusions from last week's Refunding announcement.
• Latest levels: The 2-Yr yield is down 2.7bps at 3.5638%, 5-Yr is down 4.5bps at 3.6682%, 10-Yr is down 4.9bps at 4.0674%, and 30-Yr is down 4.1bps at 4.6646%. Dec 10-Yr futures (TY) were down 1/32  at 113-00 (L: 112-27 / H: 113-2.5) - having tested key near-term resistance at 113-02, highs seen Nov 5, 7, and 11.
• Attention turns to the House vote expected at 7pm to end the government shutdown. White House's Leavitt said that it was likely October CPI and employment data would never be released - we go over prospects for those and other data releases here.
• With the expected return of government workers to their posts Thursday, we expect to soon get word on rescheduled data. However note that in 2013 we only got the BLS's updated release schedule at 4:30pm on the first day of reopening, so we won't be expecting an announcement on Thursday morning.
• However we are assured of getting some alternative data points Thursday including Chicago CARTS retail sales for October and the Dallas Fed's weekly economic index. We may also get the Department of Labor's official calculation of weekly jobless claims for the first time since the end of September, but either way we will be able to make our own estimates based on state-level data. We also hear from SF's Daly, Minneapolis's Kashkari, St Louis's Musalem and Cleveland's Hammack.

SOFR FIXES AND PRIOR SESSION REFERENCE RATES

US TSYS/OVERNIGHT REPO: Secured Rates Ticked Up Monday, Set To Stay Elevated

Secured rates ticked up on Monday Nov 10 (data was published this morning by the NY Fed which alongside rate markets was closed Tuesday due to the Veterans Day holiday).

• SOFR rose 2bp (3.95%) with TGCR up 4bp (3.93%), marking the highest both in absolute terms and relative to the Fed's administered rates (notably IORB which is 3.90%) since Nov 4 when October month-end pressures looked to have been dissipating.
• We also note that takeup of the Fed's Standing Repo Facility came in at $6.05B in this morning's operation, already the highest for a full day since Nov 3.
• Additionally, Treasury bill settlement will raise $14B in new cash today and $23B Thursday, applying some upside pressure to funding rates.
• As such it doesn't look like there will be much relief in rates today.
• Effective Fed funds were unchanged at 3.87% Monday.

REPO REFERENCE RATES (rate, change from prev. day, volume):
* Secured Overnight Financing Rate (SOFR): 3.95%, 0.02%, $3135B
* Broad General Collateral Rate (BGCR): 3.93%, 0.04%, $1234B
* Tri-Party General Collateral Rate (TGCR): 3.93%, 0.04%, $1214B

New York Fed EFFR for prior session (rate, chg from prev day):
* Daily Effective Fed Funds Rate: 3.87%, no change, volume:  $77B
* Daily Overnight Bank Funding Rate: 3.87%, no change, volume:  $161B

BONDS: EGBs-GILTS CASH CLOSE: OATs Outperform On Political Progress

OATs outperformed the broader space Wednesday, with Gilts underperforming.

• EGBs and Gilts weakened on early trade. UK instruments led the broader sell-off after having outperformed Tuesday, suffering in part from rumours surrounding a potential leadership challenge in the ruling Labour Party. The high in yields was hit in late morning trade.
• But French Finance MInister Lescure's comments that he was "fairly confident" parliament would approve the contentious budget saw EGBs gain, and the national assembly's passing a suspension of the pension age rise, boosted perceptions of political stability and saw OATs extend outperformance.
• Weaker oil prices (an OPEC+ report showed price-negative supply-demand dynamics) also helped keep a lid on yields through the session.
• On the day, the German curve bull flattened, with Gilts bear steepening. Periphery spreads tightened alongside the OAT gains.
• Thursday's schedule includes UK Q3 / September GDP and monthly activity data, along with French labour market and Eurozone industrial production. In central bank communications, the BOE's Greene and ECB's Villeroy and Elderson make appearances, while we also get the ECB's latest Economic Bulletin release.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.3bps at 1.998%, 5-Yr is down 1.2bps at 2.247%, 10-Yr is down 1.5bps at 2.643%, and 30-Yr is down 2.6bps at 3.228%.
• UK: The 2-Yr yield is up 0.4bps at 3.728%, 5-Yr is up 1bps at 3.867%, 10-Yr is up 1.1bps at 4.398%, and 30-Yr is up 1.9bps at 5.191%.
• Italian BTP spread down 1.7bps at 72.8bps / French OAT down 2.8bps at 73.6bps

EUROPE OPTIONS: More Mixed Sonia Trade Vs Recent Upside Flows

Wednesday's Europe rates/bond options flow included:

• DUZ5 107.30/107.20/107.10/106.90 broken p condor, sold at -1 in 3k
• 0RF6 98.125/98.0625/98.00/97.875 broken put condor, receives 0.5 to buy the wings in 10.5k
• SFIH6 96.35/96.45/96.70/96.80 c condor, bought for 5.25 in 5k
• SFIH6 96.55/96.45/96.35p ladder, bought for 1.5 in 4k
• SFIU6 96.65^ bought for 40 in 1k
   

FOREX: Equity Weakness Halts USDJPY Momentum, EURGBP Highest Since May 2023

• The early part of the Wednesday session saw the greenback on the front foot, highlighted by the extension higher for USDJPY, which broke above 154.50 resistance and briefly printed a fresh 9-month high of 1.5504. The moves came despite additional verbal jawboning by Japanese officials, who remain vigilant to disorderly and speculative moves in the yen.
• However, it was the sensitivity to risk that turned the fortunes for USDJPY, as significant weakness for the major equity benchmarks following the US cash open (Nasdaq declined 1.3% from session highs) stalled the pair’s advance and prompted a move back towards 154.50 in late European trade.
• The trend structure in USDJPY remains bullish and this week’s gains reinforce current conditions. Sights are on 155.53 next, a Fibonacci projection.
• In similar vein, GBPUSD traded lower for most of the session, and briefly slipped back below the 1.3100 handle. However, a larger than usual collection of option expiries stalled the downside momentum and the late turnaround for the USD prompted cable to rise back to 1.3140. Sterling weakness has been more evident via EURGBP, with the cross rising to the strongest level since May 2023. Spot briefly pierced an old high, located at 0.8835.
• Once again, dips have remained very well supported around the prior breakout level at 0.8769, highlighting the dominant uptrend. The next topside target remains at 0.8875, the April 2023 high.
• The Swiss franc extended recent gains amid optimism on a looming trade deal with the US. Details of the deal remain sparse for now, with a "technical agreement" seemingly achieved according to NZZ. EURCHF currently stands just 35 pips from the key medium-term support of 0.9206, while USDCHF has consolidated back below the 0.8000 handle, falling 0.42% today.
• Australian employment data and the preliminary read of UK Q3 GDP highlight Thursday’s economic calendar.

FX OPTIONS: Larger FX option Pipeline

• EUR/USD: Nov14 $1.1625(E1.4bln)
• AUD/USD: Nov14 $0.6750(A$2.2bln)
• USD/CAD: Nov14 C$1.4015-35($1.9bln)

US STOCKS: Dow Set For Record Close, With Healthcare And Financials Gaining

Stocks saw broad gains Wednesday as it appeared the federal government would re-open imminently, with the Dow Jones set for an all-time high close (+1.2% to 48,344) but with the Nasdaq (-0.2%) and S&P 500 (+0.1%) faring less well.

• Despite mixed tech stocks overall (Nvidia, Amazon, Google, Meta, Apple all lower, Microsoft up slightly), Advanced Micro Devices (AMD) stood out, jumping 8% on optimistic sales projections.
• Airlines (Delta, United, Southwest) were among the top 10 gainers on the S&P 500 with flight limits set to abate after the expected reopening of the federal government following a House vote after the cash close.
• Healthcare stocks led gains, up 1.5% in the S&P, while financials fared well as Goldman rose 3+% for a fresh all-time high - leading the way for the Dow's intraday record.

EQUITY TECHS: E-MINI S&P: (Z5) Bullish Recovery

• RES 4: 7000.00 Psychological round number
• RES 3: 6993.12 3.500 proj of the Aug 20 - 28 - Sep 2 price swing
• RES 2: 6974.04 3.382 proj of the Aug 20 - 28 - Sep 2 price swing
• RES 1: 6909.50/6953.75 High Nov 3 / High Oct 30 and bull trigger
• PRICE: 6892.50 @ 14:27 GMT Nov 12
• SUP 1: 6808.31/6655.70 20-day EMA / Low Nov 7 & key S/T support
• SUP 2: 6571.25 Low Oct 17
• SUP 3: 6540.25 Low Oct 10 and a key support
• SUP 4: 6476.62 23.6% retracement of the Apr 7 - Oct 30 bull cycle  

The trend condition in S&P E-Minis remains bullish and the bear leg since the Oct 30 high appears to have been a correction. The contract has managed to find support below the 50-day EMA, currently at 6722.19, and a key level. Activity on Nov 7 highlights a potential reversal signal - a bullish doji candle. This defines key support at 6655.50, the Oct 7 low. Sights are on 6953.75, Oct 30 high and bull trigger.

COMMODITIES: Crude Falls Amid Oversupply Concerns, Precious Metals Rally

• Crude has fallen sharply today amid oversupply concerns after OPEC flipped its Q3 view to a surplus.
• WTI Dec 25 is down by 4.3% at $58.4/bbl.
• The November OPEC Monthly Oil Market report showed a switch from a deficit to a surplus of 500kb/d in Q3 as US production exceeded expectations.
• Excess oil supply driven by increased OPEC and non-OPEC output also remains in focus, while uncertainty remains over the impact of the latest sanctions on Russia.
• With today’s move, price has fallen below initial support at $58.83, the Nov 6 low, narrowing the gap to key support and the bear trigger at $55.96, the Oct 20 low.
• Meanwhile, spot gold has risen by a further 1.7% to $4,197/oz on Wednesday, taking it to its highest level since Oct 21.
• The move comes ahead of a US House vote to end the government shutdown this evening. A final vote is expected at around 1900ET(0000GMT).
• Today’s rally in gold has seen price rise above initial resistance at $4,161.4, the Oct 22 high. A stronger recovery would refocus attention on $4,381.5, the Oct 20 high and bull trigger.
• Elsewhere, silver has also jumped by 4.4% to $53.5/oz, taking the precious metal to its highest since Oct 17, when it reached an all-time high of $54.48.
• Trend signals in silver remain bullish and a clearance of this record high would open $55.444, a Fibonacci projection point.

DATA/EVENTS CALENDAR

Date	GMT/Local	Impact	Country	Event
12/11/2025	2050/1550		US	New York Fed's Roberto Perli
12/11/2025	2100/1600		US	Boston Fed's Susan Collins
13/11/2025	0030/1130	***	AU	Labor Force Survey
13/11/2025	0700/0700	***	GB	UK Monthly GDP
13/11/2025	0700/0800	***	SE	Final Inflation Report
13/11/2025	0700/0700	**	GB	Trade Balance
13/11/2025	0700/0700	**	GB	Index of Services
13/11/2025	0700/0700	**	GB	Index of Production
13/11/2025	0700/0700	**	GB	Output in the Construction Industry
13/11/2025	0700/0700	***	GB	GDP First Estimate
13/11/2025	0700/0800	***	SE	Final Inflation Report
13/11/2025	0730/0730		GB	BOE MPG Minutes Released
13/11/2025	0930/0930		GB	Productivity Flash Estimates
13/11/2025	1000/1100	**	EU	EZ Industrial Production
13/11/2025	1200/1200		GB	BOE Greene in Panel on Central Bank Independence
13/11/2025	-	***	CN	Money Supply
13/11/2025	-	***	CN	New Loans
13/11/2025	-	***	CN	Social Financing
13/11/2025	-		EU	ECB de Guindos at ECOFIN Meeting in Brussels
13/11/2025	1300/1400		EU	ECB Elderson Moderates Climate and Banks Panel
13/11/2025	1300/0800		US	San Francisco Fed's Mary Daly
13/11/2025	1330/0830	***	US	Jobless Claims
13/11/2025	1330/0830	**	US	WASDE Weekly Import/Export
13/11/2025	1330/0830	***	US	CPI
13/11/2025	1330/0830	***	US	CPI
13/11/2025	1330/0830	***	US	CPI
13/11/2025	1530/1030		US	Minneapolis Fed's Neel Kashkari
13/11/2025	1630/1130	**	US	US Bill 04 Week Treasury Auction Result
13/11/2025	1630/1130	*	US	US Bill 08 Week Treasury Auction Result
13/11/2025	1700/1200	**	US	DOE Weekly Crude Oil Stocks
13/11/2025	1700/1200	**	US	US DOE Petroleum Supply
13/11/2025	1715/1215		US	St. Louis Fed's Alberto Musalem
13/11/2025	1720/1220		US	Cleveland Fed's Beth Hammack
13/11/2025	1800/1300	***	US	US Treasury Auction Result for 30 Year Bond
13/11/2025	1900/1400	**	US	Treasury Budget
14/11/2025	0001/0001		GB	KPMG/REC Report on Jobs
14/11/2025	0200/1000	***	CN	Fixed-Asset Investment
14/11/2025	0200/1000	***	CN	Retail Sales
14/11/2025	0200/1000	***	CN	Industrial Output
14/11/2025	0200/1000	**	CN	Surveyed Unemployment Rate M/M