MNI ASIA OPEN: Alternative Employment Data Declining
EXECUTIVE SUMMARY
- MNI US: GOP Sweetens Shutdown Offer For Democrats - Politico
- MNI FED BRIEF: Fed's Williams Says R-Star To Stay Low In U.S.
- MNI FED BRIEF: Fed's Hammack - Rates Policy 'Barely Restrictive'
- MNI US DATA: Dallas Fed Weekly Growth Indicator Continues To Slow From High Levels
- MNI US DATA: Chicago Fed Sees Marginal U/E Rate Rise In Oct, Still Below FOMC F'cast
- MNI US DATA: Oct Revelio Nonfarm Payrolls Drop For First Time Since May
US
MNI FED BRIEF: Fed's Williams Says R-Star To Stay Low In U.S.
Federal Reserve Bank of New York President John Williams said Thursday a prolonged period of low neutral interest rates appears likely to persist over the medium term in the United States and other major world economies. "The low r-star era I think is still with us and we still need to be very focused on issues around the ELB, at least over the medium term, for the U.S. and maybe other jurisdictions," he said in a presentation at the Goethe University Institute for Monetary and Financial Stability in Frankfurt.
MNI FED BRIEF: Fed's Hammack - Rates Policy 'Barely Restrictive'
Federal Reserve Bank of Cleveland President Beth Hammack said Thursday interest rates should stay where they are to ensure inflation returns to goal, adding monetary policy is "only barely restrictive, if that. At this point, I don’t think there is more that monetary policy can do without risking a fall off the wire," she said in remarks prepared for a talk at the Economic Club of New York.
MNI FED BRIEF: Fed Wants Banks To Use Repo Backstop - Hammack
Federal Reserve Bank of Cleveland President Beth Hammack on Thursday encouraged banks to further take advantage of the central bank's standing repo facility backstop when funding pressures are high. "I was pleased to see the take up in the standing repo facility," she told the Economic Club of New York. "I'm surprised there wasn't more take-up given where rates were trading. I expect that the banks are getting used to it and starting to recognize that in fact we do want them to take advantage of this tool."
MNI FED: Chicago's Goolsbee: Labor Market Stable, Lack Of Inflation Data A Concern
Chicago Fed's Goolsbee (2025 FOMC voter) says his bank's October labor estimates (4.36% unemployment rate) are consistent with labor market "stability": "To me, most of the labor market indicators that we're getting show a lot of stability in the market....I still think there's mild cooling."
NEWS
MNI US: GOP Sweetens Shutdown Offer For Democrats - Politico
Politico reports that Republicans submitted a new offer to Democrats to reopen the federal government. In addition to the existing proposal, which promises a Senate vote on extending Affordable Care Act tax credits and the passage of a three-bill appropriations package, the new offer includes a pledge to “discuss rehiring federal workers who have been laid off during the shutdown.”
- The offer comes ahead of a Senate Democratic caucus meeting, during which progressive members are expected to press a group of centrists to refrain from reopening the government until President Trump endorses an ACA deal, rather than simply promise an uncertain vote.
MNI UK: BOE MPC Votes 5-4 To Hold Bank Rate At 4%; Wide Range Of MPC Views Noted
BOE MPC voted 5-4 to maintain Bank Rate at 4.00% in November, with Governor Bailey joining Greene, Mann and Pill in voting for a hold. All other MPC members voted for a 25bp cut. In the Minutes, Bailey said that he "would prefer to wait and see if the durability in disinflation is confirmed in upcoming economic developments this year" before cutting again. He also suggested current market pricing is not too dissimilar from the policy implied by a forward-looking Taylor rule, which was a "fair description" of his current position.
US TSYS
MNI US TSYS: Yields Retreat, Alternative Employment Data Lagging
- Treasuries are trading sideways since climbing to session highs late Thursday morning, markets turning towards alternative employment data due to the ongoing US Govt shutdown.
- Revelio Labs' estimate of October nonfarm payrolls growth came in at -9.1k vs +33.0k prior (rev from +60.1k) and August's actual figure reported by the BLS of +22k (Revelio estimates Aug at +14.5k). That is the first negative M/M reading for the Revelio series since May.
- Fed speak: Chicago Fed's Goolsbee (2025 FOMC voter) says his bank's October labor estimates (4.36% unemployment rate) are consistent with labor market "stability". "To me, most of the labor market indicators that we're getting show a lot of stability in the market....I still think there's mild cooling."
- Federal Reserve Bank of Cleveland President Beth Hammack said Thursday interest rates should stay where they are to ensure inflation returns to goal, adding monetary policy is "only barely restrictive, if that. At this point, I don’t think there is more that monetary policy can do without risking a fall off the wire,"
- Currently, the Dec'25 10Y contract trades +15.5 at 112-26 vs. 112-30 high. Initial key near-term resistance is seen at 113-02, the Nov 5 high. The week's steepening in 2s10s stalled (-.022 at 52.528) while 5s30s continued to gain (+2.461 at 99.703).
- Projected rate cut pricing gaining vs. morning levels (*): Dec'25 at -17.2bp (-16.6bp), Jan'26 at -26.1bp (-24.6bp), Mar'26 at -35bp (-33.2bp), Apr'26 at -40.6bp (-38.9bp).
- Due to the ongoing US Govt shutdown, the employment report for October produced by the Bureau of Labor Statistics is suspended. Fed speakers, University of Michigan Sentiment / Expectations and Consumer Credit expected.
OVERNIGHT DATA
MNI US DATA: Oct Revelio Nonfarm Payrolls Drop For First Time Since May
Revelio Labs' estimate of October nonfarm payrolls growth came in at -9.1k vs +33.0k prior (rev from +60.1k) and August's actual figure reported by the BLS of +22k (Revelio estimates Aug at +14.5k). That is the first negative M/M reading for the Revelio series since May.
- While Friday's nonfarm payrolls report for October (not to mention September's) is postponed indefinitely, Revelio comes alongside other "alternative" data this week in suggesting a further deterioration in labor market conditions in October, or at best, mixed (to name a few: high Challenger Job Cut announcements, Chicago Fed unemployment rate uptick; continued fall in Indeed.com job vacancies; ADP private payrolls relatively more solid).
MNI US DATA: Chicago Fed Sees Marginal U/E Rate Rise In Oct, Still Below FOMC F'cast
The final release of the Chicago Fed’s Labor Market Indicators report for October saw its unemployment rate nowcast broadly unrevised at 4.36% vs 4.35% in the advance. It follows an estimated 4.34% for September, pointing to little change from the 4.32% in August in what was the last release from the BLS payrolls report before the government shutdown.
MNI US DATA: Dallas Fed Weekly Growth Indicator Continues To Slow From High Levels
The Dallas Fed's Weekly Economic Index (WEI) showed a pickup in growth in the week ended Nov 1, to 2.22% from 1.99% prior (scaled to 4-quarter growth). On a quarterly (13-week moving average) basis though, growth is slowly moderating: from a near 2-month stretch of printing above 2.4% Y/Y, it's now edged lower to the slowest since mid-August.
MNI CANADA DATA: Ivey Shows PMIs Converging On Flat Growth In October
The Ivey Purchasing Managers' Index showed a sharp divergence with other Canadian PMIs in October with a deterioration to 52.4 from 59.8 prior. The 50+ reading means more businesses surveyed said business improved vs deteriorated. But the underlying indices were extremely mixed.
MARKETS SNAPSHOT
Key market levels of markets in late NY trade:
DJIA down 229.78 points (-0.49%) at 47084.78
S&P E-Mini Future down 47.75 points (-0.7%) at 6778.25
Nasdaq down 310 points (-1.3%) at 23191.69
US 10-Yr yield is down 7 bps at 4.089%
US Dec 10-Yr futures are up 16/32 at 112-26.5
EURUSD up 0.0053 (0.46%) at 1.1545
USDJPY down 0.99 (-0.64%) at 153.13
WTI Crude Oil (front-month) down $0.06 (-0.1%) at $59.55
Gold is up $4.64 (0.12%) at $3984.05
European bourses closing levels:
EuroStoxx 50 down 57.95 points (-1.02%) at 5611.18
FTSE 100 down 41.3 points (-0.42%) at 9735.78
German DAX down 315.72 points (-1.31%) at 23734.02
French CAC 40 down 109.46 points (-1.36%) at 7964.77
US TREASURY FUTURES CLOSE
3M10Y -3.87, 23.023 (L: 21.408 / H: 26.078)
2Y10Y -0.216, 52.334 (L: 51.237 / H: 53.198)
2Y30Y +1.519, 111.937 (L: 109.496 / H: 112.797)
5Y30Y +2.364, 99.606 (L: 96.972 / H: 100.432)
Current futures levels:
Dec 2-Yr futures up 4/32 at 104-6.25 (L: 104-02.125 / H: 104-07.25)
Dec 5-Yr futures up 10.75/32 at 109-10.5 (L: 108-31.75 / H: 109-13)
Dec 10-Yr futures up 16/32 at 112-26.5 (L: 112-10 / H: 112-30)
Dec 30-Yr futures up 25/32 at 117-7 (L: 116-12 / H: 117-14)
Dec Ultra futures up 30/32 at 121-0 (L: 119-30 / H: 121-07)
MNI US 10YR FUTURE TECHS: (Z5) Rallies Off Support
- RES 4: 114-02 High Oct 17 and the bull trigger
- RES 3: 113-29 High Oct 22
- RES 2: 113-18+ High Oct 28
- RES 1: 113-02 High Nov 5 and a key near-term resistance
- PRICE: 112-29+ @ 16:56 GMT Nov 6
- SUP 1: 112-10/09+ Low Nov 6 / 5
- SUP 2: 112-08+ 38.2% retracement of May - Oct Upleg
- SUP 3: 112-06 Low Sep 25 and a reversal trigger & 100-dma
- SUP 4: 112-00 Trendline support drawn from the May 22 low
Prices rallied Thursday, helping erase the weakness posted into the Wednesday close. This stabilisation in prices means support holds into the weekly low at 112-10/09+. Despite the rally, a short-term bearish threat in Treasuries remains intact and Wednesday’s move down reinforces this theme. Sights are on a reversal trigger at 112-06, the Sep 25 low and the 100-DMA. Clearance of this level would expose a trendline support at 112-00 - the trendline is drawn from the May 22 low. Initial key near-term resistance is seen at 113-02, the Nov 5 high.
SOFR FUTURES CLOSE
Current White pack (Dec 25-Sep 26):
Dec 25 +0.030 at 96.250
Mar 26 +0.055 at 96.445
Jun 26 +0.065 at 96.675
Sep 26 +0.075 at 96.835
Red Pack (Dec 26-Sep 27) +0.075 to +0.080
Green Pack (Dec 27-Sep 28) +0.080 to +0.085
Blue Pack (Dec 28-Sep 29) +0.075 to +0.080
Gold Pack (Dec 29-Sep 30) +0.075 to +0.080
REFERENCE RATES
US TSYS: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 3.91% (-0.09), volume: $3.145T
- Broad General Collateral Rate (BGCR): 3.88% (-0.10), volume: $1.195T
- Tri-Party General Collateral Rate (TCR): 3.88% (-0.10), volume: $1.171T
- (rate, volume levels reflect prior session)
STIR: FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 3.87% (+0.00), volume: $94B
- Daily Overnight Bank Funding Rate: 3.87% (+0.00), volume: $166B
FED Reverse Repo Operation
RRP usage slips to $10.754B with 14 counterparties this afternoon - from $12.700B Wednesday. Compares to $2.435B on October 24 (lowest level since mid-March 2021) and the year's highest usage of $460.731B on June 30.
MNI PIPELINE: Corporate Bond Roundup: $6.2B Global Payments 4Pt Launched
- Date $MM Issuer (Priced *, Launch #)
- 11/06 $6.2B #Global Payments $1.75B 3Y +95, $1.7B 5Y +120, $1B 7Y +135, $1.75B 10Y +150
- 11/06 $1.75B #Targa Resources $750M +3Y +80, $1B +10Y +132
- 11/06 $1.5B #Equinor $250M 3Y Tap +38, $250M 5Y tap +48, $1B 10Y +73
- 11/06 $700M #Canadian National $300M +5Y +55, $400M 10Y +70
- 11/06 $Benchmark Brazil +7Y 5.75%, 2035 tap 6.2%
- 11/06 $750M #Eagle Materials 10Y +105
- $9.65B Priced Wednesday, $56.05B/wk
MNI BONDS: EGBs-GILTS CASH CLOSE: Bull Flatter With BOE December Cut Teed Up
European yields pulled back Thursday in a bull flattening move.
- The session's focus was the BOE decision: the MPC held rates by a 5-4 vote. That saw an initial hawkish move in Gilts (there had been around 33% market-implied prob of a cut), but they subsequently rallied as the communications suggested it was more likely than not that Gov Bailey would vote for a December cut (he voted for a hold this time).
- For yet another session though the afternoon was dominated by US developments. Treasuries rallied amid soft US labour market data (job cuts / payroll gains/ unemployment rate via various "alternative" indicators) and fading chances of a conclusion to the federal government shutdown as the weekend approaches. Gilts and Bunds gained in sympathy.
- Global equities slumped too after edging higher early: periphery/semi-core EGB spreads edged higher as the session went on, reflecting the downward move in equities, ultimately closing wider.
- The German and UK curves both bull flattened, with Gilts outperforming.
- Friday's data slate is highlighted by German and French trade, with central bank speakers including BOE's Pill and ECB's Nagel, Villeroy and Elderson.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 1.7bps at 1.987%, 5-Yr is down 2.3bps at 2.247%, 10-Yr is down 2.3bps at 2.65%, and 30-Yr is down 2.1bps at 3.238%.
- UK: The 2-Yr yield is down 1.8bps at 3.786%, 5-Yr is down 3.3bps at 3.897%, 10-Yr is down 3bps at 4.433%, and 30-Yr is down 3.1bps at 5.218%.
- Italian BTP spread up 1.1bps at 76.2bps / French OAT up 0.9bps at 79.4bps
MNI FOREX: Cross/JPY Slumps as US Yields & Equities Decline on Limited Weak US Data
- Both US yields and equities have fallen sharply on Thursday, reflective of the poor alternative US jobs data released (Revelio, Challenger, Chicago Fed), painting a relatively bleak picture of the US economy in the absence of the tier one figures.
- The dollar index is tracking 0.45% in the red today as the broader dollar rally that has been playing out following the FOMC is showing signs of fatigue. The DXY reaching its initial objective at the August highs (~100.25) may have also contributed to the reversal lower on Thursday.
- These dynamics have significantly boosted the Japanese Yen, a clear outperformer in the G10 FX space, while the likes of AUD and NZD have been particular laggards. AUDJPY and NZDJPY are currently down 1.4% on the session, echoing the two percent losses for the Nasdaq as we approach the APAC crossover. USDJPY has also slipped below 153.00 to new weekly lows.
- AUDJPY has not closed below its 50-day EMA since August 22, and therefore a close below 98.50 will be closely eyed. For NZDUSD (-0.60%), the pair has extended the break of trendline support (drawn from the April lows) to print fresh cycle lows below 0.5630.
- Although CAD losses are of a smaller magnitude, USDCAD notably rose back to an important level on the chart, the top of the bull channel, drawn from the July 23 low. While the resistance has held again, the pair is now on a 6-session winning streak. This week’s extension for USDCAD highlights a clear reversal of the corrective bear leg between Oct 14 - 29. 1.4167 is the next level of note, the 50.0% retracement of the Feb 3 - Jun 16 bear leg.
- An dovish hold from the Bank of England did little to move the needle for GBP, with potential positioning dynamics contributing to sterling outperformance today. Note that the cable downtrend was in oversold territory and a recovery would allow this condition to unwind. Initial resistance is at 1.3142, the Aug 1 low.
- Canada jobs data highlights the G10 calendar on Friday. Currently a -5k change in employment is expected, with the unemployment rate seen remaining steady at 7.1%.
FRIDAY DATA CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 07/11/2025 | 0700/0800 | ** |  DE | Trade Balance |
| 07/11/2025 | 0745/0845 | * |  FR | Foreign Trade |
| 07/11/2025 | 0800/0300 |  US | New York Fed's John Williams | |
| 07/11/2025 | 1110/1110 |  GB | BOE Saporta At ECB Money Market Conference | |
| 07/11/2025 | 1200/0700 | US | Fed Vice Chair Philip Jefferson | |
| 07/11/2025 | 1200/1200 | GB | BOE Market Participants Survey | |
| 07/11/2025 | - | *** |  CN | Trade |
| 07/11/2025 | - | GB | BOE MPG Agenda Published | |
| 07/11/2025 | 1330/0830 | *** |  CA | Labour Force Survey |
| 07/11/2025 | 1330/0830 | *** | US | Employment Report |
| 07/11/2025 | 1330/0830 | *** | US | Employment Report |
| 07/11/2025 | 1330/0830 | *** | US | Employment Report |
| 07/11/2025 | 1330/0830 | *** | US | Employment Report |
| 07/11/2025 | 1330/1430 |  EU | ECB Elderson At Bundesbank Event | |
| 07/11/2025 | 1500/1000 | ** | US | University of Michigan Surveys of Consumers Inflation Expectation |
| 07/11/2025 | 1500/1000 | *** | US | U. Mich. Survey of Consumers |
| 07/11/2025 | 1515/1515 | GB | BOE Pill At National Agency Briefing | |
| 07/11/2025 | 1600/1100 | ** | US | NY Fed Survey of Consumer Expectations |
| 07/11/2025 | 1800/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
| 07/11/2025 | 1800/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
| 07/11/2025 | 1800/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
| 07/11/2025 | 2000/1500 | * | US | Consumer Credit |
| 07/11/2025 | 2000/1500 | US | Fed Governor Stephen Miran |
