MNI ASIA OPEN: CPI Preview, Export Curbs & Trade Tensions

EXECUTIVE SUMMARY 

• MNI GLOBAL: US Considering Curbs on Exports to China made with US Software (Reuters)
• MNI FED: FOMC No Longer Getting Weekly ADP Payrolls Data: WSJ
• MNI US INFLATION: MNI US CPI Preview: The Year’s Last ‘Reliable’ CPI Read?
• MNI US DATA: Purchase Mortgage Applications Fall By Most Since July
• MNI US OUTLOOK/OPINION: Financial Conditions Remain Loose By Most Measures

US

MNI FED: FOMC No Longer Getting Weekly ADP Payrolls Data: WSJ

The Wall Street Journal reports citing sources that the ADP has stopped providing the Fed with weekly data on private payrolls and earnings. Per the WSJ piece, the Fed has had access to the data since "at least 2018", and was available to the Fed with "a roughly one-week delay". The publicly-available ADP payrolls report is published monthly.

NEWS

MNI GLOBAL: US Considering Curbs on Exports to China made with US Software (Reuters)

(Reuters) - "The Trump administration is considering a plan to curb a dizzying array of software-powered exports to China, from laptops to jet engines, to retaliate against Beijing's latest round of rare earth export restrictions, according to a U.S. official and three people briefed by U.S. authorities."

• Further from the article: "To be sure, the measure, details of which are being reported for the first time, may not move forward, the sources said. But the fact that such controls are being considered shows the Trump administration is weighing a dramatic escalation of its showdown with China, even as some within the U.S. government favor a gentler approach, according to two of the sources."

MNI RUSSIA: Kremlin-'Budapest Summit Needs More Prep', Despite Trump Cancellation

State-run Tass reporting comments from Kremlin spox Dmitry Peskov regarding the apparent cancellation of the Budapest summit between President Vladimir Putin and his US counterpart Donald Trump (see 'RUSSIA: Budapest Conference Off, But Background Work Continues', 08:53BST). Peskov claims there is no news yet regarding the summit; "rumours and speculation" about the situation surrounding its preparations are largely inaccurate. Peskov claims that "The dates [for the summit] haven't been set; that's still to come. Thorough preparation is needed before then, and that takes time". Peskov repeats Trump's comments, saying that neither side wants to "waste time". 

MNI IRAN: For Min-No Return To Negotiations Until US Abandons 'Unreasonable Demands'

Semi-official outlet Tasnim reports comments from Foreign Minister Abbas Araghchi regarding the state of relations with the United States. Speaking in Mashhad, Araghchi says, "The negotiations that were previously underway with the Americans, as well as the negotiations in New York, were halted and did not move forward due to the excessive demands of the American side. We will not return to the negotiating table until the Americans abandon their excessive policy and make unreasonable demands of us."

US TSYS

MNI US TSYS: Tsys Buoyed Amid Ongoing Trade Tensions

• Treasuries look to finish modestly higher Wednesday, reversing midmorning losses after Reuters reported the Trump admin "is considering broad restrictions of exports to China made with US software, citing an unnamed US official and three people briefed by US authorities."
• No noticeable reaction in rates after late Bbg headline: "US TO ANNOUNCE 'PICK UP' IN RUSSIA SANCTIONS TODAY OR TOMORROW".
• Treasury futures gain slightly (TYZ5 113-24 +0.0) after $13B 20Y Bond auction re-open (912810UN6) stopped through - drawing a high yield of 4.506% vs 4.517% WI at the cutoff; 2.73x bid-to-cover vs. 2.74x prior.
• The Wall Street Journal reports citing sources that the ADP has stopped providing the Fed with weekly data on private payrolls and earnings. Per the WSJ piece, the Fed has had access to the data since "at least 2018", and was available to the Fed with "a roughly one-week delay". The publicly-available ADP payrolls report is published monthly.
• Equity earnings expected to release after the close include Southwest Airlines, Raymond James, Churchill Downs, Alcoa, Crown Castle, United Rental, Lam Research, Tesla and IBM.
• Thursday's weekly Jobless Claims & Chicago Fed data suspended.

OVERNIGHT DATA

MNI US INFLATION: MNI US CPI Preview: The Year’s Last ‘Reliable’ CPI Read?

The delayed September CPI report is due for release on Friday Oct 24 at 0830ET, with the BLS making an exception on social security payments grounds during the government shutdown. It’s possibly the last report that won’t be adversely impacted by the shutdown until the new year, although quality concerns were already elevated with high reliance on imputed values back in August.

• We see a median unrounded analyst estimate at 0.40% M/M for headline and 0.30% M/M for core CPI. This would mark a marginal sequential acceleration for headline as energy strength offsets a slight moderation in core after a stronger than expected 0.35% M/M in August.
• Monthly core CPI inflation is expected to see firmer goods inflation across a variety of items but softer services, primarily from rents after what’s seen as a temporary upside surprise in August. Core CPI inflation is expected to hold at 3.1% Y/Y for a third consecutive month whilst headline CPI firms two tenths to 3.1% Y/Y for its fastest since May 2024 but with chance of rounding to 3.0%.

MNI US OUTLOOK/OPINION: Financial Conditions Remain Loose By Most Measures

Wednesday's release of the Chicago Fed's National Financial Conditions Index (NFCI) for the week ending Oct 17 was another reminder that overall financial conditions remain loose and should generally be thought of as a tailwind to US economic growth. 

• Per the Chicago Fed, "The NFCI was unchanged at –0.55 in the week ending October 17. Risk indicators contributed –0.27, credit indicators contributed –0.17, and leverage indicators contributed –0.10 to the index in the latest week." That's the most negative the index has printed since the beginning of 2021 and has progressively moved lower since mid-April.

MNI US DATA: Purchase Mortgage Applications Fall By Most Since July

MBA mortgage applications were little changed last week, with a lift in refis offsetting a sizeable drop in new purchase applications. Mortgage rate spreads ticked higher after declines had slowed in recent weeks, offering a diminished tailwind for applications. MBA composite mortgage applications dipped -0.3% (sa) last week, essentially unchanged having fallen a cumulative 19% since late September after a refi-driven 42% jump in the first half of September.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA down 308.07 points (-0.66%) at 46613.06
S&P E-Mini Future down 33.25 points (-0.49%) at 6739.25
Nasdaq down 206.7 points (-0.9%) at 22742.21
US 10-Yr yield is down 1 bps at 3.9531%
US Dec 10-Yr futures are up 0.5/32 at 113-24.5
EURUSD up 0.0007 (0.06%) at 1.1607
USDJPY up 0.04 (0.03%) at 151.98
#VALUE!
Gold is down $17.9 (-0.43%) at $4107.95

European bourses closing levels:
EuroStoxx 50 down 47.62 points (-0.84%) at 5639.21
FTSE 100 up 88.01 points (0.93%) at 9515
German DAX down 178.9 points (-0.74%) at 24151.13
French CAC 40 down 51.99 points (-0.63%) at 8206.87

US TREASURY FUTURES CLOSE

3M10Y -1.179, 6.554 (L: 4.837 / H: 8.914)
2Y10Y +0.308, 50.864 (L: 49.279 / H: 51.323)
2Y30Y +0.893, 109.46 (L: 107.144 / H: 109.996)
5Y30Y +0.67, 98.402 (L: 96.984 / H: 99.003)
Current futures levels:
Dec 2-Yr futures up 0.5/32 at 104-15 (L: 104-13.625 / H: 104-15.5)
Dec 5-Yr futures up 0.75/32 at 109-29.75 (L: 109-26.5 / H: 109-31.75)
Dec 10-Yr futures up 0.5/32 at 113-24.5 (L: 113-19.5 / H: 113-29)
Dec 30-Yr futures up 2/32 at 119-8 (L: 119-01 / H: 119-19)
Dec Ultra futures up 3/32 at 123-28 (L: 123-18 / H: 124-10)

MNI US 10YR FUTURE TECHS: (Z5) Bull Cycle Intact

• RES 4: 115-00+ High Oct 1 ‘24 (cont)
• RES 3: 114-21+ 1.00 proi of the Aug 18 - Sep 11 - 25 price swing
• RES 2: 114-10   High Apr 7 (cont) and a key resistance
• RES 1: 114-02   High Oct 17
• PRICE:‌‌ 113-24 @ 11:15 BST Oct 22
• SUP 1: 113-03+ 20-day EMA
• SUP 2: 112-30   Low Oct 13
• SUP 3: 112-22   50-day EMA
• SUP 4: 112-06   Low Sep 25 and a reversal trigger

Bullish conditions in Treasuries remain intact. The recent breach of key resistance at 113-29, the Sep 11 high, confirms a resumption of the medium-term uptrend. Moving average studies are in a bull-mode position and this set-up highlights a dominant uptrend. Sights are on 114-10, the Apr 7 high (cont) and the next key resistance. Firm support lies at 11303+, the 20-day EMA.

SOFR FUTURES CLOSE

Current White pack (Dec 25-Sep 26):
Dec 25 -0.005 at 96.370
Mar 26 steady at 96.645
Jun 26 steady at 96.875
Sep 26 steady at 97.020
Red Pack (Dec 26-Sep 27) steady to +0.005
Green Pack (Dec 27-Sep 28) -0.01 to -0.005
Blue Pack (Dec 28-Sep 29) -0.02 to -0.015
Gold Pack (Dec 29-Sep 30) -0.02 to -0.02

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

• Secured Overnight Financing Rate (SOFR): 4.23% (+0.07), volume: $2.957T
• Broad General Collateral Rate (BGCR): 4.21% (+0.09), volume: $1.163T
• Tri-Party General Collateral Rate (TCR): 4.21% (+0.09), volume: $1.132T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.11% (+0.00), volume: $85B
• Daily Overnight Bank Funding Rate: 4.11% (+0.00), volume: $162B

FED Reverse Repo Operation

RRP usage recedes to $4.005B with 8 counterparties this afternoon from $4.699B Tuesday. Compares to $3,516B on Tuesday, Oct 13 (lowest level since early April 2021) & this year's high usage of $460.731B on June 30.

MNI PIPELINE: Corporate Bond Update: $1.6B Dominican Republic 10Y Launched

• Date $MM Issuer (Priced *, Launch #)
• 10/22 $2B #Softbank $900M 35.5NC5.5 7.625%, $1.1B 40NC10 8.25% (includes E750M 37NC7)
• 10/22 $1.6B #Dominican Republic 10Y 5.875%
• 10/22 $1.5B #Alberta 10Y SOFR+81
• 10/22 $1B Rep of Korea WNG 5Y +17
• 10/22 $1B #GM Financial 3Y +78
• 10/22 $Benchmark Pershing Square 7Y investor calls

MNI BONDS: EGBS-GILTS CASH CLOSE: Soft UK CPI Provides The Latest Boost To Gilts

Gilts easily outperformed peers Wednesday.

• The UK September CPI report came in softer than expectations, triggering a sizeable bull steepening of the Gilt curve as a further 25bp BoE cut by year-end became priced as more likely than not (closing at about 70% priced vs closer to 40% at Tuesday's close).
• The inflation data built upon other recent dovish developments in the UK including on the labor market data and public sector finance fronts.
• In contrast, EGBs gained slightly but were relatively stable following the UK CPI release.
• For the day, the German curve bear steepened slightly, with the UK's closing bull steeper.
• Periphery/semi-core EGB spreads tightened modestly.
• The highlight for the remainder of the week remains Friday's flash October PMIs, with US CPI that day also in focus.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 0.1bps at 1.909%, 5-Yr is up 0.5bps at 2.16%, 10-Yr is up 1.1bps at 2.563%, and 30-Yr is up 1.9bps at 3.147%.
• UK: The 2-Yr yield is down 9.1bps at 3.767%, 5-Yr is down 7.2bps at 3.872%, 10-Yr is down 6.1bps at 4.417%, and 30-Yr is down 4.5bps at 5.221%.
• Italian BTP spread down 0.7bps at 78.5bps / French OAT down 0.3bps at 78.9bps  

MNI FOREX: Greenback Reverses Early Gains, USDCAD Slides Back Below 1.4000

• Initial price action on Wednesday was once again constructive for the dollar, allowing the DXY to extend its rally this week. However, this sentiment steadily reversed across US hours, with the index slipping into negative territory approaching the APAC crossover. Currency market drivers have been few and far between, with most pointing to some short-term positioning squaring as we approach the US CPI report on Friday.
• Late source reports that the US is considering curbs on exports to China made with US software negatively impacted risk sentiment for a brief time, with equity prices sharply plumbing new lows, however there was little lasting impact on currencies.
• GBP was in the spotlight early, following a softer-than-expected CPI report that subsequently weighed firmly on sterling. GBPUSD fell from around 1.3380 down to 1.3306, strengthening the narrative that the recent recovery in the pair appears corrective. Key support and the bear trigger lies at 1.3249, the Oct 14 low. A break of it would resume the recent bear leg.
• Elsewhere, the Canadian dollar modestly outperforms in G10, helping USDCAD slide back below the 1.40 mark. Spot traded down to initial support at the 20-day EMA, intersecting at 1.3976. A close below the average will be monitored in coming sessions, with Canadian retail sales data due tomorrow.
• Risk in EURSEK remains tilted to the downside, with spot hovering just above support at 10.9036, the Sep 15 low. Clearance of this level would expose the April 4 low at 10.7941. Spot is on track for a sixth consecutive close lower, currently -0.10% today.
• Ahead of tomorrow's inaugural SNB meeting minutes, EURCHF consolidates yesterday's bounce from key clustered support between 0.9206/21. Tomorrow's minutes will signal how far the SNB was away from cutting into negative territory in September, and we specifically look for any indication of whether Schlegel's decision not to mention of negative side effects of NIRP was a deliberate move.

THURSDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
23/10/2025	0645/0845	**	FR	Manufacturing Sentiment
23/10/2025	0900/1000	**	GB	Gilt Outright Auction Result
23/10/2025	1000/1100	**	GB	CBI Industrial Trends
23/10/2025	1100/0700	***	TR	Turkey Benchmark Rate
23/10/2025	-		EU	ECB Lagarde at Euro Summit in Brussels
23/10/2025	1230/0830	***	US	Jobless Claims
23/10/2025	1230/0830	**	US	WASDE Weekly Import/Export
23/10/2025	1230/0830	**	CA	Retail Trade
23/10/2025	1230/0830	**	CA	Retail Trade
23/10/2025	1330/1530		EU	ECB Lane Award Acceptance Speech
23/10/2025	1400/1000	***	US	NAR existing home sales
23/10/2025	1400/1600	**	EU	Consumer Confidence Indicator (p)
23/10/2025	1400/1000		US	Fed Vice Chair Michelle Bowman
23/10/2025	1425/1025		US	Fed Governor Michael Barr
23/10/2025	1430/1030	**	US	Natural Gas Stocks
23/10/2025	1500/1100	**	US	Kansas City Fed Manufacturing Index
23/10/2025	1530/1130	*	US	US Bill 08 Week Treasury Auction Result
23/10/2025	1530/1130	**	US	US Bill 04 Week Treasury Auction Result
23/10/2025	1700/1300	**	US	US Treasury Auction Result for TIPS 5 Year Note
24/10/2025	2200/0900	***	AU	Judo Bank Flash Australia PMI
24/10/2025	2301/0001	**	GB	Gfk Monthly Consumer Confidence
24/10/2025	2330/0830	***	JP	CPI
24/10/2025	0030/0930	**	JP	Jibun Bank Flash Japan PMI