MNI ASIA OPEN: CPI Focus After May Jobs Surge; BOC, ECB Policy

EXECUTIVE SUMMARY

• MNI: Fed May Need to Act Soon Against High Inflation - Hammack
• MNI BoC Preview-Jun 2026: Holding Still The Right Thing To Do
• MNI US TSYS: Stronger Than Expected May Jobs, Rate Hike Projected by Year End
• MNI US TSYS/SUPPLY: MNI UST Issuance Deep Dive: June 2026
• MNI US LABOR MARKET: MNI US Employment Insight: Payrolls Surge, Hike Seen This Year

US

MNI: Fed May Need to Act Soon Against High Inflation - Hammack

Federal Reserve Bank of Cleveland President Beth Hammack said Friday it’s reasonable to hold interest rates steady for now given uncertainties about the economic outlook, but officials may need to act soon to address elevated inflation. "For today, it’s reasonable to keep rates steady given the uncertainties around the economic outlook. But if recent trends continue, it may soon be appropriate to act," she said in a post on social media. 

MNI US: Democrat Chances Of Winning Senate Dips Amid Platner's Struggles In Maine

The prospect of Democrats flipping control of the Senate at the midterms in November has dipped amid a faltering campaign from likely Democratic party nominee, Graham Platner, in the crucial Maine Senate race. Maine is one of the 'core four' races that Democrats likely must win, along with Michigan, North Carolina, and Georgia. 

CANADA

MNI BoC Preview-Jun 2026: Holding Still The Right Thing To Do

Our preview of the June BOC meeting is Hidden PDF - The Bank of Canada is overwhelmingly expected by both markets and analysts to maintain its overnight rate for a 5th consecutive decision at 2.25% at the June meeting (announcement on June 10).

NEWS

New York Times: Iran Fires Missiles at Israel for First Time Since April Cease-Fire - Israel had attacked the outskirts of the Lebanese capital, Beirut, earlier Sunday, prompting threats of Iranian retaliation. There were no immediate reports of casualties from the Iranian missile fire.

MNI IRAN: Fars Source Denies Report of Agreement to Transfer HEU to Third Country

Iran’s Fars News: A source close to Iran's negotiating team on Friday denied a Saudi media report that Tehran had agreed to transfer part of its enriched uranium stockpile to a third country, calling it false. "The issue of transferring uranium reserves is not on the current agenda of the negotiations, and first the American side must take specific and decisive steps and we must reach clear and final agreements on some fundamental issues."

MNI Iran Says Fired Warning Shots at US Destroyers in Gulf of Oman

“IRAN'S NAVY SAYS IT FIRED WARNING SHOTS AT U.S. DESTROYERS IN GULF OF OMAN - STATE MEDIA” RTRS

US TSYS

MNI US TSYS: Stronger Than Expected May Jobs, Rate Hike Projected by Year End

• Treasuries are broadly weaker late Friday - holding to a relatively narrow range after the initial knee-jerk sell-off on higher than expected job gains for May: +172k vs. +88k est, as well as a large two-month upward revision of 93k.
• May jobs growth may have been supported by the seasonal adjustment and a weather boost, but broader trends are still impressively strong. The unemployment rate in the household survey was as expected meanwhile, continuing its broad stabilization since the summer. A Fed hike has shifted to being priced for December from Mar 2027 beforehand, with Wednesday’s CPI report a next key input.
• TYU6 is currently at 109-01 (-18) vs. 108-31 low with 10Y yield climbing to 4.5522%. Projected rate pricing swings hawkish (first 25bp hike in Dec): latest vs. late Thursday levels (*): Jun'26 at +.8bp (+.4bp), Jul'26 at +3.5bp (+2.6bp), Sep'26 at +11bp (+7.6bp), Oct'26 at +16.5bp (+10.1bp), Dec'26 +27.6bp (+17.3bp).
• A very solid set of US May jobs data has sparked a significant leap higher for the US dollar on Friday. With US yields spiking and risk sentiment heavily dented, this dollar surge extended across the session, with the DXY threatening to close back above the 100 mark, near two-month highs.
• WTI Crude ended lower as the market weighs the prospects of a US-Iran deal, though Iran insists it has halted talks amid continued fighting in southern Lebanon. Trump made some remarks on Air Force One that didn’t illuminate anything about peace talks.
• Look ahead - next week highlights: US CPI on Wednesday followed by PPI Thursday. The Bank of Canada is overwhelmingly expected to maintain its overnight rate for a 5th consecutive decision at 2.25% at the June meeting (announcement on June 10). The ECB is expected to deliver a 25bp rate hike on Thursday, bringing the deposit rate to 2.25%.
• China CPI & PPI next Wednesday: CPI is expected to rise only modestly to +1.3% from +1.2% and present no immediate challenges for policy.

MNI US TSYS/SUPPLY: MNI UST Issuance Deep Dive: June 2026

We've published our monthly issuance deep dive - Hidden PDF - The actual coupon size announcements for the May refunding auctions and estimates for the quarter brought no drama: the updated sizes through the coming months (including MNI Ests) is in the table below. The quarter’s financing requirements probably contained the most surprises of the refunding round, and even here they were relatively modest.

• More impactful  was the lack of change in  issuance guidance, which further pushed back expectations for the timing of the next size increase to well into 2027 if not beyond.
• We go through those outcomes from the May refunding, as well as tweaks to 20Y refunding auction settlements, and analysts' views.
• Monthly Auction Review: May saw another month of slightly soft coupon auctions. The only trade-through was the 7-year UST, which saw a high yield just 0.1bp below the when-issued level. The 2- and 20-year lines came out on the screws, while tails were elsewhere.

OVERNIGHT DATA

MNI US DATA: Govt Helps NFP Beat And Revisions But Private Still Very Solid

• A large beat for nonfarm payrolls growth in May at 172k (sa, cons 88k), doubly so considering a large two-month upward revision of 93k.
• It’s after 179k in Apr (revised +64k) and 214k in Mar (revised +29k). It’s somewhat caveated by a return of very strong public sector job creation, with 52k in May after 2k in Apr (revised from -8k) and 12k in Mar (revised from -5k).
• Private payrolls were still clearly stronger than expected though, at 120k in May (cons 89k) after a two-month revision of 66k (of which 54k of that upward revision came in April).
• Three-month averages: nonfarm at 188k, private at 166k
• Six-month averages: nonfarm at 92k (strongest since Feb 2025), private at 87k (strongest since Jun 2024)

MNI US LABOR MARKET: MNI US Employment Insight: Payrolls Surge, Hike Seen This Year

• We have published and e-mailed to subscribers the MNI US Employment Insight.
• Please find the full report, including detailed MNI analysis of the payrolls release plus a variety of other key labor indicators, here: Hidden PDF 

MNI CANADA DATA: Canada Labour Market Surges On Full-Time Employment

• Canada's unemployment rate fell to 6.6% in May from 6.9% in April as the economy added 154K full-time workers, welcome news for the BoC following last week's flat GDP report missed expectations. Total employment rose about 88K.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA down 711.68 points (-1.38%) at 50858.31
S&P E-Mini Future down 201 points (-2.64%) at 7400.5
Nasdaq down 1080.9 points (-4%) at 25754.25
US 10-Yr yield is up 6.9 bps at 4.5422%
US Sep 10-Yr futures are down 17.5/32 at 109-1.5
EURUSD down 0.0089 (-0.77%) at 1.1522
USDJPY up 0.17 (0.11%) at 160.19
WTI Crude Oil (front-month) down $2.83 (-3.04%) at $90.19
Gold is down $153.77 (-3.44%) at $4322.13

European bourses closing levels:
EuroStoxx 50 down 41.26 points (-0.68%) at 6062.07
FTSE 100 up 7.73 points (0.07%) at 10368.05
German DAX down 185.9 points (-0.75%) at 24759.05
French CAC 40 down 26.05 points (-0.32%) at 8218.24

US TREASURY FUTURES CLOSE

Curve update:
3M10Y +6.543, 82.657 (L: 74.176 / H: 83.693)
2Y10Y -4.707, 37.857 (L: 36.797 / H: 43.238)
2Y30Y -8.516, 84.217 (L: 82.76 / H: 93.966)
5Y30Y -6.465, 72.272 (L: 71.035 / H: 81.025)
Current futures levels:
Sep 2-Yr futures down 7.25/32 at 102-31.25 (L: 102-30.125 / H: 103-08.25)
Sep 5-Yr futures down 14/32 at 106-19 (L: 106-16.75 / H: 107-04.75)
Sep 10-Yr futures down 17.5/32 at 109-1.5 (L: 108-31 / H: 109-24)
Sep 30-Yr futures down 20/32 at 111-21 (L: 111-16 / H: 112-16)
Sep Ultra futures down 16/32 at 114-5 (L: 113-26 / H: 114-29)

MNI US 10YR FUTURE TECHS: (U6) Bearish Outlook

• RES 4: 111-02+ High Apr 24
• RES 3: 110-28+ High May 7
• RES 2: 110-07   50-day EMA
• RES 1: 110-00+ High May 29
• PRICE:‌‌ 109-03+ @ 14:28 BST Jun 5
• SUP 1: 108-28+ Low May 22
• SUP 2: 108-08+ Low May 19 and the bear trigger
• SUP 3: 108-04   1.382 proj of Apr 17 - May 4 - 7 swing
• SUP 4: 107-29   1.618 proj of the Apr 17 - May 4 - 7 price swing

Treasuries are trading lower today. This reinforces a M/T bearish theme and also potentially provides an early signal that the corrective cycle that started May 19, is over. Note that recent gains have allowed an oversold trend condition to unwind. Resistance to watch is 110-07, the 50-day EMA. The bear trigger lies at 108-08+, the May 19 low. Clearance of this level would confirm a resumption of the downtrend.

SOFR FUTURES CLOSE

Current White pack (Jun 26-Mar 27):
Jun 26 -0.013 at 96.335
Sep 26 -0.060 at 96.20
Dec 26 -0.110 at 96.035
Mar 27 -0.135 at 95.920
Red Pack (Jun 27-Mar 28) -0.135 to -0.125
Green Pack (Jun 28-Mar 29) -0.115 to -0.085
Blue Pack (Jun 29-Mar 30) -0.08 to -0.065
Gold Pack (Jun 30-Mar 31) -0.055 to -0.035

REFERENCE RATES
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US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 3.62% (+0.01), volume: $3.147T
• Broad General Collateral Rate (BGCR): 3.59% (+0.00), volume: $1.300T
• Tri-Party General Collateral Rate (TCR): 3.59% (+0.00), volume: $1.275T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 3.62% (+0.00), volume: $121B
• Daily Overnight Bank Funding Rate: 3.62% (+0.00), volume: $262B

FED Reverse Repo Operation

RRP usage at $0.761B with 5 counterparties this afternoon vs. $1.122B Thursday. Compares to last year's highest excess liquidity measure: $460.731B on June 30.

MNI BONDS: EGBs-GILTS CASH CLOSE: Broad Weakness On US Job Jump

Strong US employment data Friday sealed EGB and Gilt losses for the week.

• European bonds traded mixed to start the session, with the habitual mixed US-Iran newsflow leaving Bunds and Gilts relatively steady going into the US Employment report.
• With US payroll gains more than doubling analyst expectations with higher prior revisions, global rates sold off aggressively as implied Federal Reserve tightening was brought forward from 2027 to end-2026, triggering short-end/belly underperformance.
• Earlier in the session, a softer than expected round of inflationary readings in the latest BoE DMP survey looked in MNI's view to decrease the odds of additional hawkish MPC dissenters later this month and reduce the odds of a July hike.
• In Eurozone data, compensation per employee eased in Q1, while GDP's downward revision (-0.2% vs +0.1% flash) was as expected on the back of a poor Irish print.
• Gilts outperformed Bunds, with both the German and UK curves leaning bear flatter. Periphery/semi-core spreads closed the session little changed/slightly wider.
• For the week as a whole, curves bear flattened: UK 2Y yield +13bp, 10Y +9bp; German 2Y +16bp, 10Y +10bp.
• Next week's highlight is the ECB decision Thursday.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 3.1bps at 2.692%, 5-Yr is up 2.9bps at 2.768%, 10-Yr is up 1.5bps at 3.038%, and 30-Yr is up 0.8bps at 3.571%.
• UK: The 2-Yr yield is up 0.5bps at 4.338%, 5-Yr is up 1.2bps at 4.464%, 10-Yr is up 0.5bps at 4.903%, and 30-Yr is up 0.2bps at 5.588%.
• Italian BTP spread up 1.7bps at 76.3bps / French OAT up 0.4bps at 65bps  

MNI FOREX: Stellar US Employment and Souring Risk Prompt USD Surge

• A very solid set of US May jobs data has sparked a significant leap higher for the US dollar on Friday. With US yields spiking and risk sentiment heavily dented, this dollar surge extended across the session, with the DXY threatening to close back above the 100 mark, near two-month highs.
• Alongside the negative impact on equities, both precious metals and crypto markets have also come under severe pressure, exacerbating the dollar appreciation as we approach the weekend close. Bitcoin posted below $60k for the first time since October 2024.
• Intra-day weakness has been centered around the likes of AUD and NZD, where declines have surpassed the 1% mark, while the Norwegian krone remains bottom of the G10 leaderboard, falling 1.3% against the dollar. For NZDUSD in particular, the latest leg lower has seen the entire post-RBNZ rally eroded, with the pair also breaching support at 0.5815. Below here, support looks scant until the year’s worst levels just below the 0.57 mark.
• Several attempts for EURUSD below 1.16 over the past couple of weeks have failed to accelerate downside momentum in the pair, however, latest price action appears to be confirming the recent underlying bearish trend. The pair is now testing below the bear channel base, which intersects at 1.1545. A break of this level would strengthen a bearish threat and place the focus back on 1.1411 which remains the key support, the March 13 and 16 lows.
• The Canadian dollar was a relative outperformer after a particularly strong set of employment data as well, and a very notable downtick in the unemployment rate to 6.6%.
• Elsewhere, risk and yield dynamics have really put the pressure on the emerging market FX basket Friday, as Latin American currencies bear the brunt of the souring sentiment, with the Chilean peso down 2.4%. Higher beta plays such as BRL and ZAR are now down 1,7% while USDMXN has had a very clean break above its 50-day EMA, extending session gains to 1.4% above 17.50. 

MONDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
08/06/2026	0500/1400		JP	Economy Watcher's Survey
08/06/2026	0600/0800	**	DE	Manufacturing Orders
08/06/2026	1200/0800	*	US	NY Fed SOFR
08/06/2026	1300/0900	*	US	NY Fed EFFR
08/06/2026	1500/1100	**	US	NY Fed Survey of Consumer Expectations
08/06/2026	1530/1130	*	US	US Treasury Auction Result for 13 Week Bill
08/06/2026	1530/1130	*	US	US Treasury Auction Result for 26 Week Bill
09/06/2026	2301/0001	*	GB	BRC-KPMG Shop Sales Monitor