MNI ASIA OPEN: A Step Closer to Discovering Next Fed Chair?

EXECUTIVE SUMMARY

• MNI: Fed Biased To Ease With Focus On Jobs - Ex-Officials
• MNI BRIEF: Fed's Goolsbee-Need More Inflation Data To Cut
• MNI BRIEF: Fed's Hammack Says Inflation Has Been Too High
• MNI BRIEF: Fed's Schmid-Dissented On Strong Growth, Inflation
• MNI EU-RUSSIA: EU Set To Pass Workaround To Freeze Russian Assets Long-Term
• MNI US OUTLOOK/OPINION: Primary Dealers Look For 50k Nov Payroll Gains, U/E Tickup
• MNI FED: Trump Tells WSJ: Leaning To Warsh Or Hassett As Fed Chair

US

MNI: Fed Biased To Ease With Focus On Jobs - Ex-Officials

The Federal Reserve is still inclined to keep cutting interest rates as policymakers worry predominantly about employment weakness, even if the bar for additional easing is higher with borrowing costs closer to neutral, former central bank officials and staffers told MNI. “I read the direction of travel as dovish. While the SEP highlighted the hawkish disagreement around the table, the chair's comments clearly placed more weight on the cooling labor market dynamics than inflation,” said former Kansas City Fed President Esther George.  

MNI BRIEF: Fed's Schmid-Dissented On Strong Growth, Inflation

Federal Reserve Bank of Kansas City President Jeff Schmid said Friday he dissented against a quarter-point rate cut this week for the same reasons that he did so in October: inflation remains too high and the labor market is still in balance. "I have not fundamentally changed my views on the economy relative to October. Inflation remains too high, the economy shows continued momentum, and the labor market — though cooling — remains largely in balance," he said in a statement. "I view the current stance of monetary policy as being only modestly, if at all, restrictive." 

MNI BRIEF: Fed's Hammack Says Inflation Has Been Too High

Federal Reserve Bank of Cleveland President Beth Hammack on Friday said inflation has been too high, and noted the importance of achieving price stability over the longer term in a way that will support the labor market. "Inflation has been too high, and it's been holding there at those levels for some time, but we are seeing some softening on the labor side of the economy," she said in Q&A at an University of Cincinnati event. "I am truly committed to the 2% objective. I think it's critically important that we do bring inflation back down towards our target."

MNI BRIEF: Fed's Paulson More Concerned About Jobs Than Prices

Philadelphia Fed President Anna Paulson said Friday job market weakness warrants slightly more concern than inflation, which is likely headed lower next year as the effects of tariffs pass through prices and restrictive interest rates continue to pull down price growth. "On net, I am still a little more concerned about labor market weakness than about upside risks to inflation. That’s partly because I see a decent chance that inflation will come down as we go through next year," she said in remarks prepared for the Delaware State Chamber of Commerce. Tariff effects should dissipate by mid-2026, leaving inflation around 2.5%. 

MNI BRIEF: Fed's Goolsbee-Need More Inflation Data To Cut

Chicago Federal Reserve Bank President Austan Goolsbee said Friday he dissented against this week's FOMC decision to lower interest rates by a quarter percentage point because he is seeking more confirmation that inflation is easing. "While I voted to lower rates at the September and October meetings, I believe we should have waited to get more data, especially about inflation, before lowering rates further," Goolsbee said in a statement.

MNI FED: Trump Tells WSJ: Leaning To Warsh Or Hassett As Fed Chair

President Trump has told the Wall Street Journal in an interview Friday that he was leaning toward either Kevin Warsh or Kevin Hassett as his pick for the next Fed Chair. Warsh's probability of becoming Fed chair is spiking (40%, up 25pp on Kalshi in the last few minutes) on prediction markets with the interview suggesting the ex-Fed governor is neck-and-neck with previously presumptive favorite Hassett (57%).

• "In an interview with The Wall Street Journal in the Oval Office on Friday, the president said Warsh was at the top of his list. "Yes, I think he is. I think you have Kevin and Kevin. They're both -- I think the two Kevins are great," he said. "I think there are a couple of other people that are great.""

NEWS

MNI EU-RUSSIA: EU Set To Pass Workaround To Freeze Russian Assets Long-Term

Reuters reporting comments from European Commission Exec VP Valdis Dombrovskis regarding the EU's efforts to use frozen Russian assets held in the Union to fund Ukraine's reconstruction. On the Russian Central Bank's claims that the use of the frozen funds would be illegal, Dombrovskis says that EU financial institutions holding the assets are 'fully protected from legal proceedings", and that "under the current EU sanctions regime, central securities depositories like Euroclear [in Belgium, where the bulk of the assets are held] can offset any seizure of their assets in Russia with immobilised Russian assets in the EU."

MNI CANADA: PM Homes In On Improbable Majority After Another Conservative Defection

The defection of Greater Toronto Area MP Michael Ma from the Conservatives to the Liberals late on 11 December leaves PM Mark Carney's gov't just one seat short of an overall majority in the House of Commons. This scenario would have been viewed as improbable following the hung parliament delivered in the April federal election. Ma represents the Markham-Unionville riding, which has flipped between the Liberals and Conservatives in recent electoral cycles. 

MNI UKRAINE: Germany To Host Leaders Summit 15 Dec, No Assurance Of US Attendance

A statement from the German gov't has confirmed that Ukrainian President Volodymyr Zelenskyy will be in Berlin on Monday, 15 December, for talks with Chancellor Friedrich Merz for 'economic talks' and to discuss the nascent peace framework. Afterwards, 'numerous European heads of state and government, as well as the top representatives of the EU and NATO, will join the discussions.'

MNI THAILAND: Caretaker PM: Trump Not Likely To Link Conflict To Tariffs

Comments from caretaker PM Anutin Charnvirakul following his call with US President Donald Trump. Says that the talk took place in a "good atmosphere", and that Trump was "concerned about the fighting with Cambodia" and "wants to return to the ceasefire". Anutin says that he "explained to Trump that Thailand must protect its sovereignty and people", also confirming that there is no ceasefire currently in place.

US TSYS

MNI US TSYS: Fed Returns From Blackout, Curves Bear Steepen, 2s10s Near 4Y Highs

• Treasuries look to finish weaker Friday, near lows after rates retreat to Wednesday's pre-FOMC rate cut level (TYH6 -8.5 at 112-06), curves steepened (2s10s +4.932 to 66.436, highest since Jan 2022), and Fed speakers returned from Blackout.
• Federal Reserve Bank of Kansas City President Jeff Schmid said Friday he dissented against a quarter-point rate cut this week for the same reasons that he did so in October: inflation remains too high and the labor market is still in balance.
• Federal Reserve Bank of Cleveland President Beth Hammack on Friday said inflation has been too high, and noted the importance of achieving price stability over the longer term in a way that will support the labor market.
• Chicago Federal Reserve Bank President Austan Goolsbee said Friday he dissented against this week's FOMC decision to lower interest rates by a quarter percentage point because he is seeking more confirmation that inflation is easing.
• Tech heavy Nasdaq dragged the DJIA off new record highs (48,886.86) as ongoing AI-valuations concerns weighed heavily on semiconductor makers.
• Focus turns to next week's November employment report on Tuesday.

OVERNIGHT DATA

• The New York Fed Staff Nowcast for 2025:Q4 is 1.8%, with the 50% probability interval at [0.6, 3.0]% and the 80% interval at [-0.4, 4.2]%. The Staff Nowcast for 2026:Q1 is 2.2%.
• News from this week's data releases increased the estimate for 2025:Q4 by 0.1 percentage point and left the estimate for 2026:Q1 largely unchanged.
• Positive surprises from exports and JOLTS data drove the increase for 2025:Q4.

MNI US OUTLOOK/OPINION: Primary Dealers Look For 50k Nov Payroll Gains, U/E Tickup

We'll be publishing our full nonfarm payrolls preview on Monday ahead of the combined November/October release out Tuesday. Our early survey of primary dealer analyst expectations shows a median expectation of 50k gains in November after a drop of 40k in October (which follows +119k in September) - we will round this out with additional surveys on Monday.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA down 286.51 points (-0.59%) at 48417.35
S&P E-Mini Future down 86 points (-1.25%) at 6821.5
Nasdaq down 429.2 points (-1.8%) at 23164.53
US 10-Yr yield is up 3.5 bps at 4.1919%
US Mar 10-Yr futures are down 9/32 at 112-5.5
EURUSD up 0.0005 (0.04%) at 1.1742
USDJPY up 0.24 (0.15%) at 155.83
WTI Crude Oil (front-month) down $0.23 (-0.4%) at $57.38
Gold is up $17.21 (0.4%) at $4297.13

European bourses closing levels:
EuroStoxx 50 down 33.25 points (-0.58%) at 5720.71
FTSE 100 down 54.13 points (-0.56%) at 9649.03
German DAX down 108.12 points (-0.45%) at 24186.49
French CAC 40 down 17.14 points (-0.21%) at 8068.62

US TREASURY FUTURES CLOSE

Curve update:
3M10Y +6.992, 56.918 (L: 47.66 / H: 57.691)
2Y10Y +4.723, 66.137 (L: 61.685 / H: 66.763)
2Y30Y +6.887, 132.729 (L: 126.281 / H: 133.559)
5Y30Y +4.26, 110.735 (L: 107.066 / H: 111.802)
Current futures levels:
Mar 2-Yr futures down 0.125/32 at 104-9.75 (L: 104-08.25 / H: 104-10.375)
Mar 5-Yr futures down 4.25/32 at 109-3 (L: 109-01.5 / H: 109-07)
Mar 10-Yr futures down 9/32 at 112-5.5 (L: 112-03.5 / H: 112-14)
Mar 30-Yr futures down 33/32 at 114-19 (L: 114-17 / H: 115-17)
Mar Ultra futures down 41/32 at 117-14 (L: 117-07 / H: 118-20)

MNI US 10YR FUTURE TECHS: (H6) Bear Threat Still Present

• RES 4: 113-29+ High Oct 17 and a key resistance
• RES 3: 113-23   High Oct 23
• RES 2: 113-07/22+ High Dec 3 / High Nov 25
• RES 1: 112-23   High Dec 11 and the 20-day EMA
• PRICE:‌‌ 112-05+ @ 16:35 GMT Dec 12
• SUP 1: 111-29   Low Dec 10 and the bear trigger
• SUP 2: 111-19   1.236 proj of the Oct 17 - Nov 5 - 25 price swing
• SUP 3: 111-11   1.382 proj of the Oct 17 - Nov 5 - 25 price swing
• SUP 4: 111-00   Round number support 

A bearish theme in Treasuries remains intact and the latest bounce appears corrective. The rally Thursday topped out at 112-23, meaning resistance at  the 20-day EMA, currently at 112-23, remains intact. A continuation lower would refocus attention on key short-term support at 111-29, the Dec 10 low. Clearance of this level would confirm a resumption of the bear leg and open 111-19, a Fibonacci projection. 

SOFR FUTURES CLOSE

Current White pack (Dec 25-Sep 26):
Dec 25 steady00 at 96.288
Mar 26 +0.005 at 96.460
Jun 26 +0.005 at 96.670
Sep 26 steady00 at 96.805
Red Pack (Dec 26-Sep 27) -0.035 to -0.01
Green Pack (Dec 27-Sep 28) -0.05 to -0.04
Blue Pack (Dec 28-Sep 29) -0.05 to -0.045
Gold Pack (Dec 29-Sep 30) -0.055 to -0.055

REFERENCE RATES
​​​​​​​
US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 3.66% (-0.24), volume: $3.299T
• Broad General Collateral Rate (BGCR): 3.62% (-0.25), volume: $1.338T
• Tri-Party General Collateral Rate (TCR): 3.62% (-0.25), volume: $1.304T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 3.64% (-0.25), volume: $99B
• Daily Overnight Bank Funding Rate: 3.64% (-0.25), volume: $184B

FED Reverse Repo Operation

RRP usage retreats to new low: $0.838B (lowest level since mid-March 2021) with 6 counterparties this afternoon from $2.874B Thursday. Compares to prior low on November 18 low: $0.905B; this years highest excess liquidity measure: $460.731B on June 30.

MNI BONDS: EGBs-GILTS CASH CLOSE: Curves Twist Steepen Ahead Of Busy Week

Yields picked up Friday, with long-end Gilts underperforming. The German and UK curves both twist steepened on the day.

• Gilts led the way at the short end, following softer-than-expected UK GDP data driving dovish BOE repricing ahead of next week's meeting, with long end yields picking up on concerns that weaker growth could exacerbate fiscal pressures.
• EGBs/Gilts saw some additional modest weakness in the early European afternoon alongside Global FI on a hawkish Bloomberg sources piece on the Bank of Japan.
• Periphery/semi-core EGB spreads widened toward the cash close, mirroring a pullback in equities.
• Otherwise, developments were limited. Final November inflation readings for Germany, France, and Spain brought no significant surprises.
• For the week, the UK curve twist steepened (2Y yield -3.4bp, 10y +4.1bp) with Germany's ending flat (2Y and 10Y both +5.9bp).
• Next week's schedule is packed, with the final BOE and ECB decisions of the year, as well as flash PMIs and UK CPI and labour market reports.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.6bps at 2.154%, 5-Yr is up 0.4bps at 2.468%, 10-Yr is up 1.4bps at 2.857%, and 30-Yr is up 2.9bps at 3.481%.
• UK: The 2-Yr yield is down 2.4bps at 3.747%, 5-Yr is down 0.4bps at 3.955%, 10-Yr is up 3.3bps at 4.517%, and 30-Yr is up 6.1bps at 5.268%.
• Italian BTP spread up 0.7bps at 69.1bps / French OAT up 1.1bps at 72.4bps

MNI FOREX: Moderate USD Boost Friday, DXY Broadly Consolidates Weekly Decline

• Having held resistance well across November, the USD’s turn lower gathered downside momentum this week, assisted by a not so hawkish cut from the Fed. This prompted the USD index to briefly extend its three-week pullback to ~2.25% on Thursday, before a partial reprieve across Friday’s session.
• Despite a sharp move lower for major equity indices late Friday, impact on the DXY has been moderate, and is currently registering a 0.55% decline on the week. The late selloff has weighed on the likes of AUD (-0.39%) and NZD (-0.28%), while GBP has suffered following the weaker-than-expected October GDP, bolstering the likelihood of a BOE cut next week.
• The worst performing currencies are both the NOK and SEK today, with limited newsflow to explain the moves. Some may point to a potentially delayed reaction to waning oil prices across the week as contributing to the 0.75% move higher for EURNOK, which has risen to the highest level since late August.
• USDCAD weakness has been one of the most notable developments in G10 FX over the last week, with spot extending lower following an impressive technical breakdown. Friday’s Canadian dollar relative resilience emphasises this narrative and downside targets for USDCAD include 1.3682, the 76.4% retracement of the Jun 16 - Nov 6 bull cycle and 1.3637, the Jul 25 low.
• Tier-one data from the US returns next week, with employment and inflation data headlining. Rate decisions from the BOE, ECB, BOJ, Riksbank and Norges are all scheduled.

MONDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
15/12/2025	1000/0500	*	CA	CREA Existing Home Sales
15/12/2025	1000/1100	**	EU	EZ Industrial Production
15/12/2025	1315/0815	**	CA	CMHC Housing Starts
15/12/2025	1330/0830	**	CA	Monthly Survey of Manufacturing
15/12/2025	1330/0830	**	US	Empire State Manufacturing Survey
15/12/2025	1330/0830	**	US	WASDE Weekly Import/Export
15/12/2025	1330/0830	***	CA	CPI
15/12/2025	1430/0930		US	Fed Governor Stephen Miran
15/12/2025	1500/1000	**	US	NAHB Home Builder Index
15/12/2025	1530/1030		US	New York Fed's John Williams
15/12/2025	1630/1130	*	US	US Treasury Auction Result for 13 Week Bill
15/12/2025	1630/1130	*	US	US Treasury Auction Result for 26 Week Bill
16/12/2025	2200/0900	***	AU	Judo Bank Flash Australia PMI
16/12/2025	0030/0930	**	JP	Jibun Bank Flash Japan PMI