MNI ASIA OPEN: Curves Twist Flatter, Decent Data, 7Y SAle Tail
EXECUTIVE SUMMARY
- MNI US-CHINA: Huang In Talks w/Trump Admin On Selling Blackwell Chips To China
- MNI SECURITY: US Welcomes E3 Decision To Trigger Iran Sanctions Snapback - Rubio
- MNI TARIFFS: EU Publish Proposals To Begin Implementation Of EU-US Trade Deal
- MNI US DATA: Real GDP Q2 Revision Driven By Non-Residential Investment
- MNI US DATA: Pending Home Sales Still Pointing To Soft Activity
- MNI US DATA: Jobless Claims Marginally Better Than Expected
US
MNI BRIEF: Fed's Cook Fights Back On Trump Firing Attempt
Federal Reserve Governor Lisa Cook filed suit Thursday pushing back against President Donald Trump's attempt to fire her earlier this week, arguing the president's move would undermine the Federal Reserve Act and violates her Fifth Amendment due process rights. "Governor Cook seeks immediate declaratory and injunctive relief to confirm her status as a member of the Board of Governors, safeguard her and the Board’s congressionally mandated independence, and allow Governor Cook and the Federal Reserve to continue its critical work," the suit filed by her legal team stated. (See MNI: Experts Say Fed's Cook Will Prevail Against Trump)
NEWS
MNI US-CHINA: Huang In Talks w/Trump Admin On Selling Blackwell Chips To China
Liz Claman at Fox Business reports on X that Nvidia CEO Jensen Huang is in talks with the Trump administration "about selling his better Blackwell AI chip to China," and "he’s willing to give US govt a cut of those sales." Huang's comments come after a soft revenue report from Nvidia appeared to signal decelerating AI growth. Barron's noted an absence of new sales to China for two quarters as the major drag on the company's growth.
MNI SECURITY: US Welcomes E3 Decision To Trigger Iran Sanctions Snapback - Rubio
US Secretary of State Marco Rubio says in a statement that the US “welcomes” the decision by European countries to initiate the ‘snapback’ of UN sanctions on Iran. Rubio says the E3 “have laid out a clear case of Iran’s continuing 'significant non-performance' of its nuclear commitments…” Rubio notes that the E3 could have initiated snapback at any point since 2019, “but chose instead to first pursue intensive outreach and engagement.”
MNI TARIFFS: EU Publish Proposals To Begin Implementation Of EU-US Trade Deal
The European Commission has published a press release and Q&A regarding its latest proposals intended to pave the way for the implementation of the EU-US Joinst Statement of 21 Aug. EU: "These proposals are the first steps in said implementation and ensure tariff relief by the US for the vital EU automotive sector starting retroactively from 1st of August." US tariffs on EU cars and car parts stood at 27.5% since 2 April. With these proposals instigating the legislative procedure, the tariffs should drop to 15%.
MNI US: Trump Considers Calling For GOP Convention Prior To Midterms
President Donald Trump posts on Truth Social: "...I am thinking of recommending a National Convention to the Republican Party, just prior to the Midterms. It has never been done before. STAY TUNED!!! DONALD J. TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA!"
US TSYS
US TSYS: Tsys Finishing Near Highs, Curves Reverse Midweek Steepening
- Off early lows, Treasuries look to finish mostly higher & near the top end of the session range Thursday, following similar bounce in Bunds - curves twisting flatter with the short end resisting the move: 2s10s -5.179 at 56.990, 5s30s -4.728 at 117.528.
- Treasury futures had extend lows after lower than expected continuing jobless claims data, prior down-revised as well, weekly claims decline largely in-line with expectations. Initial jobless claims were essentially as expected at 229k (sa, cons 230k). Continuing claims meanwhile surprised lower at 1954k (cons 1966k) in the week to Aug 16, covering a payrolls reference period.
- Second read of core PCE in-line while GDP annualized figure rises higher than anticipated. Real GDP revised to 3.29% annualized (cons 3.1) from 2.97% in the advance Q2 release, after -0.5% in Q1. Real personal consumption revised to 1.57% annualized (cons 1.6) from 1.44% in the advance Q2 release, after 0.5% in Q1.
- Meanwhile, the National Association of Realtors' index of pending home sales fell to 71.4 in July from 72.0 prior, a 3-month low and a little worse than expected (-0.4% M/M vs -0.2% expected, -0.8% prior).
- Treasuries recovered quickly after the $44B 7Y note auction (91282CNW7) tailed: 3.925% high yield vs. WI of 3.920%; bid-to-cover 2.49x from 2.79x prior.
- Note, WTI crude has rallied in recent trade and is now higher on the day as the market awaits an expected Trump announcement on Russia/Ukraine later.
- Looking ahead to Friday's Data Calendar: Personal Income/Spending, Core PCE, Chi PMI and U of Mich Sentiment/inflation expectations.
OVERNIGHT DATA
MNI US DATA: Real GDP Q2 Revision Driven By Non-Residential Investment
- Real GDP revised to 3.29% annualized (cons 3.1) from 2.97% in the advance Q2 release, after -0.5% in Q1.
- Real personal consumption revised to 1.57% annualized (cons 1.6) from 1.44% in the advance Q2 release, after 0.5% in Q1.
- Real PDFP revised to 1.92% annualized from 1.23% in the advance Q2 release, after 1.9% in Q1.
- See the below table for changes in contributions (noting that’s contributions and not % changes):
MNI US DATA: Pending Home Sales Still Pointing To Soft Activity
The National Association of Realtors' index of pending home sales fell to 71.4 in July from 72.0 prior, a 3-month low and a little worse than expected (-0.4% M/M vs -0.2% expected, -0.8% prior). This index is a leading indicator of existing single-family home sales and as such it doesn't appear that there will be any imminent pickup in activity from already historically low levels.
MNI US DATA: Jobless Claims Marginally Better Than Expected
Latest jobless claims data were in line to slightly better than expected, with initial claims trending a little higher but still impressively low whilst continuing claims are broadly plateauing after sharper increases in 1H25. The non-seasonally adjusted level of continuing claims supports this, above levels for recent non-pandemic years but recently maintaining this relative gap rather than pushing higher still.
- Initial jobless claims were essentially as expected at 229k (sa, cons 230k) in the week to Aug 23 after a marginally downward revised 234k (initial 235k) the week prior. Continuing claims meanwhile surprised lower at 1954k (cons 1966k) in the week to Aug 16, covering a payrolls reference period, after a downward revised 1961k (initial 1972k).
MNI CANADA DATA: Canada June Payroll Employment -32.9K Led by Manufacturing
- June payroll employment -0.2% MOM or -32.9K, according to StatsCan's secondary payrolls report out Thursday. That comes after +0.1% In May. Decline in June was seen in 10 out of 20 sectors led by manufacturing, retail, construction and healthcare.
Key market levels of markets in late NY trade:
DJIA up 59.56 points (0.13%) at 45624.9
S&P E-Mini Future up 20.75 points (0.32%) at 6516.75
Nasdaq up 123.6 points (0.6%) at 21713.76
US 10-Yr yield is down 2.3 bps at 4.2111%
US Sep 10-Yr futures are up 3/32 at 112-16
EURUSD up 0.0045 (0.39%) at 1.1684
USDJPY down 0.51 (-0.35%) at 146.91
WTI Crude Oil (front-month) up $0.21 (0.33%) at $64.36
Gold is up $21.48 (0.63%) at $3418.85
European bourses closing levels:
EuroStoxx 50 up 3.66 points (0.07%) at 5396.73
FTSE 100 down 38.68 points (-0.42%) at 9216.82
German DAX down 6.29 points (-0.03%) at 24039.92
French CAC 40 up 18.67 points (0.24%) at 7762.6
US TREASURY FUTURES CLOSE
3M10Y -2.535, 2.871 (L: 1.319 / H: 6.162)
2Y10Y -4.986, 57.183 (L: 56.569 / H: 61.738)
2Y30Y -6.834, 123.933 (L: 123.116 / H: 129.642)
5Y30Y -4.496, 117.76 (L: 117.211 / H: 121.396)
Current futures levels:
Sep 2-Yr futures down 1.125/32 at 103-30.375 (L: 103-29.875 / H: 104-00.5)
Sep 5-Yr futures steady at at 109-8.25 (L: 109-05 / H: 109-11)
Sep 10-Yr futures up 3/32 at 112-16 (L: 112-09 / H: 112-18.5)
Sep 30-Yr futures up 15/32 at 115-3 (L: 114-17 / H: 115-08)
Sep Ultra futures up 20/32 at 117-17 (L: 116-22 / H: 117-23)
MNI US 10YR FUTURE TECHS: (Z5) Fresh Cycle High
- RES 4: 113-06 2.236 proj of the Jul 15 - 22 - 28 price swing
- RES 3: 113-00 Round number resistance
- RES 2: 112-28+ 2.000 proj of the Jul 15 - 22 - 28 price swing
- RES 1: 112-19+ Intraday high
- PRICE: 112-15+ @ 11:29 BST Aug 28
- SUP 1: 111-27 20-day EMA
- SUP 2: 111-16 50-day EMA
- SUP 3: 111-13+ Low Aug 18 and a key support
- SUP 4: 110-25 Low Aug 1
The trend outlook in Treasury futures remains bullish. Today’s gains have delivered a print above 112-15+, the Aug 5 high and a bull trigger. A clear break of this hurdle would confirm a resumption of the bull cycle and pave the way for a climb towards the 113-00 handle. Moving average studies are in a bull-mode position, reinforcing current trend conditions. First support to watch is 111-27, the 20-day EMA.
SOFR FUTURES CLOSE
Current White pack (Sep 25-Jun 26):
Sep 25 -0.003 at 95.898
Dec 25 -0.025 at 96.210
Mar 26 -0.040 at 96.465
Jun 26 -0.035 at 96.740
Red Pack (Sep 26-Jun 27) -0.03 to -0.005
Green Pack (Sep 27-Jun 28) +0.005 to +0.010
Blue Pack (Sep 28-Jun 29) +0.010 to +0.020
Gold Pack (Sep 29-Jun 30) +0.020 to +0.030
REFERENCE RATES (PRIOR SESSION)
US TSYS: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 4.36% (-0.02), volume: $2.889T
- Broad General Collateral Rate (BGCR): 4.35% (-0.02), volume: $1.162T
- Tri-Party General Collateral Rate (TCR): 4.35% (-0.02), volume: $1.120T
- (rate, volume levels reflect prior session)
STIR: FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $114B
- Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $229B
FED Reverse Repo Operation
RRP usage slips to $31.966B with 20 counterparties this afternoon, from $34.744B yesterday. Compares to $22.344B on Tuesday, Aug 19 - lowest since April 5, 2021 vs. this year's high usage of $460.731B on June 30.
PIPELINE
No new corporate issuance Thursday after $6.25B Priced Wednesday, $12.05B total on the week.
MNI BONDS: EGBs-GILTS CASH CLOSE: Bunds Underperform Ahead Of Inflation Data
Gilts easily outperformed Bunds Thursday, with periphery/semi-core EGBs regaining ground after a poor start to the week.
- Bunds and Gilts gained in overnight trade, catching up to a Treasury rally late Wednesday, but turned lower in the European morning.
- There were no major data/headline triggers for the reversal, but EGBs appeared to track equity moves fairly closely, with a top in Bund yields and move back lower coinciding with the mirror-image move in Eurostoxx.
- The converse was true for periphery/semi-core EGBs, with OAT spreads nearing the session's widest levels in the early afternoon. However, spreads opened the session tighter (in a slight recovery move after Wednesday saw a post-January wide in 10Y OAT/Bund spread) and closed the day narrower.
- The accounts of the July 23-24 ECB meeting noted that "a view" was expressed about cutting rates but that keeping rates unchanged was deemed a "robust approach".
- In data, Belgium HICP inflation held steady in August, while Eurozone bank lending to households and non-financial corporations continued to steadily accelerate in July. Eurozone and Italian confidence indicators failed to move the needle.
- The German curve twist flattened, with the UK's bull flattening.
- Friday's scheduled highlight is flash August inflation data for Spain, France, Italy, and Germany. MNI's preview is here.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is up 1.9bps at 1.934%, 5-Yr is up 0.6bps at 2.243%, 10-Yr is down 0.5bps at 2.695%, and 30-Yr is down 0.9bps at 3.298%.
- UK: The 2-Yr yield is down 2.8bps at 3.936%, 5-Yr is down 3.6bps at 4.097%, 10-Yr is down 3.7bps at 4.699%, and 30-Yr is down 3bps at 5.57%.
- Italian BTP spread down 3.1bps at 84.2bps / French OAT down 3.8bps at 78.6bps.
MNI FOREX: USD Index Lower, But Remains Anchored by 50-dma
- Having started Thursday trade on a more stable footing, the USD faded Thursday, putting the USD Index into negative territory - although remaining anchored by the 50-dma of 98.061 throughout. Further Fed independence questions follow the counter-suing of President Trump from Fed's Cook - leaving a notable question mark over the make-up of the FOMC later this year.
- Meanwhile, a renewed phase of USD sales pressured USD/CNH to new pullback - and year-to-date lows - of 7.1212. Much market focus remains on the PBOC fix overnight, which was marked higher (USD/CNY lower) relative to expectations - making for the strongest CNY fix since November of last year (down to 7.1063 from 7.1108).
- The stronger CNY fix provides more evidence that Chinese authorities are endorsing and pursuing strength in the currency in the context higher global trade tensions (Mexico are set to join the US in raising tariffs on Chinese imports) and as China's top trade negotiator Li Chenggang has travelled to Washington this week for talks with US officials. While no groundbreaking trade deal news is expected, it is a further sign of warmer relations, and may set up a Trump-Xi summit later this year.
- Datapoints pick up notably on Friday, with Japanese jobless data, prelim CPIs from France, Italy and Germany keeping markets busy ahead of the US open, with July PCE, trade balance, MNI Chicago PMI and UMich sentiment data set to follow.
- Fed's Waller is set to speak after the market close today - a leading contender for the next Fed Chair role and now one of the outright doves on the FOMC, there are two-sided risks to market reaction. Whilst there is a low bar to him surprising hawkishly vs prior comments (especially if he offers stronger pushback against recent independence challenges), it's worth noting that his dissenting statement warning on labor market stresses came just before the weak payrolls report. Kalshi betting has for a few weeks now had Waller as the lead contender for Fed Chair, with 30% chance.
FRIDAY DATA CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 29/08/2025 | 0600/0800 | *** |  SE | GDP |
| 29/08/2025 | 0600/0800 | ** | SE | Retail Sales |
| 29/08/2025 | 0600/0800 | ** |  DE | Import/Export Prices |
| 29/08/2025 | 0600/0800 | ** | DE | Retail Sales |
| 29/08/2025 | 0630/0730 |  GB | DMO to release FQ3 (Oct-Dec) issuance ops calendar | |
| 29/08/2025 | 0645/0845 | *** |  FR | HICP (p) |
| 29/08/2025 | 0645/0845 | ** | FR | PPI |
| 29/08/2025 | 0645/0845 | *** | FR | GDP (f) |
| 29/08/2025 | 0645/0845 | ** | FR | Consumer Spending |
| 29/08/2025 | 0700/0900 | *** |  ES | HICP (p) |
| 29/08/2025 | 0755/0955 | ** | DE | Unemployment |
| 29/08/2025 | 0800/1000 | *** |  IT | GDP (f) |
| 29/08/2025 | 0800/1000 | *** | DE | Bavaria CPI |
| 29/08/2025 | 0800/1000 | *** | DE | North Rhine Westphalia CPI |
| 29/08/2025 | 0800/1000 | *** | DE | Baden Wuerttemberg CPI |
| 29/08/2025 | 0800/1000 | ** |  EU | ECB Consumer Expectations Survey |
| 29/08/2025 | 0900/1100 | *** | IT | HICP (p) |
| 29/08/2025 | 0900/1100 | EU | ECB de Guindos at Cursos Europeos de Verano | |
| 29/08/2025 | 1200/1400 | *** | DE | Germany CPI (p) |
| 29/08/2025 | 1200/1400 | *** | DE | Germany CPI (p) |
| 29/08/2025 | 1230/0830 | *** |  CA | GDP - Canadian Economic Accounts |
| 29/08/2025 | 1230/0830 | *** | CA | Gross Domestic Product by Industry |
| 29/08/2025 | 1230/0830 | *** | CA | CA GDP by Industry and GDP Canadian Economic Accounts Combined |
| 29/08/2025 | 1230/0830 | *** |  US | Personal Income and Consumption |
| 29/08/2025 | 1230/0830 | ** | US | Advance Trade, Advance Business Inventories |
| 29/08/2025 | 1342/0942 | *** | US | MNI Chicago PMI |
| 29/08/2025 | 1400/1000 | *** | US | U. Mich. Survey of Consumers |
| 29/08/2025 | 1400/1000 | ** | US | University of Michigan Surveys of Consumers Inflation Expectation |
| 29/08/2025 | 1500/1100 | CA | Finance Dept monthly Fiscal Monitor (expected) | |
| 29/08/2025 | 1700/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
| 29/08/2025 | 1700/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
