MNI ASIA OPEN: Divergent Policy Guidance, Short Holiday Week

EXECUTIVE SUMMARY

• MNI BOJ: Board Member Masu Notes That Rate Hike Is "Getting Closer"
• MNI FED: NY's Williams Adds Support To More-Likely-Than-Not December Cut
• MNI FED: Logan (’26 Voter) Repeats Difficulty In Supporting Dec Cut After NFPs
• MNI FED: Boston's Collins Not Swayed By Payrolls Data, Seems In Dovish Hold Camp
• MNI US DATA: UMichigan: Inflation Expectations Softens Amid Recessionary Sentiment

US

MNI FED: NY's Williams Adds Support To More-Likely-Than-Not December Cut

NY Fed Pres Williams (permanent FOMC voter) doesn't often provide much clear guidance on his rate cut preferences, which makes his comments in a speech Friday indicating his support for a December cut ("in the near term") notable, particularly after the September payrolls release: "I view monetary policy as being modestly restrictive, although somewhat less so than before our recent actions. Therefore, I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral, thereby maintaining the balance between the achievement of our two goals."

MNI FED: Boston's Collins Not Swayed By Payrolls Data, Seems In Dovish Hold Camp

Boston Fed Pres Collins (2025 FOMC Voter) - who previously suggested she wouldn't support a December rate cut - says on CNBC that the latest jobs data hasn't really changed her view. As such, there's a clear division on the Committee between a hold-leaning set of regional Presidents (Collins and Goolsbee have suggested since the September payrolls data that they still wouldn't support a December cut, and Musalem and Schmid are even more hawkish than they are), and the FOMC core which we still think is more inclined to cut (NY's Williams today).

MNI FED: Logan (’26 Voter) Repeats Difficulty In Supporting Dec Cut After NFPs

Dallas Fed’s Logan ('26 voter, hawk) has echoed her prior views. This from last week: "I think it would be hard to support another rate cut unless we were to get convincing evidence that inflation is really coming down faster than my expectations or that we were seeing more than the gradual cooling that we've been seeing in the labor market". 

Bloomberg: Boston Fed Collins: "CONTINUE TO SEE RISKS TO INFLATION SIDE OF MANDATE ... MILDLY RESTRICTIVE POLICY HELPS ENSURE DISINFLATION"

NEWS

MNI BOJ: Board Member Masu Notes That Rate Hike Is "Getting Closer"

BOJ board member Masu tells Nikkei that the decision to raise interest rates is "getting closer". He notes that "I can't say what month it'll be, but in terms of distance, we're close". Masu also provided comments to Jiji in an interview released around an hour ago (see here). 

MNI UKRAINE: Flurry Of Calls Expected Amid Talks Around US-Russia 28-Point Plan

A flurry of calls between President Volodymyr Zelenskyy and international leaders is expected to take place today amid the ongoing talks and speculation regarding the US-Russian 28-point peace plan that was presented to the Ukrainian president on 20 November. First, Zelenskyy will talk with German Chancellor Friedrich Merz, French President Emmanuel Macron, and British Prime Minister Sir Keir Starmer.

US TSYS

MNI US TSYS: Dovish Fed Williams Comments Raise Chances of Dec Cut

• Treasuries look to finish stronger Friday - upper half of the range but off early knee jerk highs after NY Fed Pres Williams dovish comment he still sees potential for near term rate cut. Projected rate cut pricing: current levels vs. early morning (*): Dec'25 at -17bp (-9.3bp), Jan'26 at -26.1bp (-23.6bp), Mar'26 at -34.5bp (-35.1bp), Apr'26 at -44.1bp (-44.1bp).
• "I view monetary policy as being modestly restrictive, although somewhat less so than before our recent actions. Therefore, I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral, thereby maintaining the balance between the achievement of our two goals," Williams Said.
• Treasuries held moderate gains after the S&P Global PMIs data were on balance stronger than expected in the flash November release, led by services increasing slightly whilst manufacturing fell a little more than expected. Overall activity saw the largest rise in new business seen so far this year whilst selling prices reaccelerated on the back of one of the fastest rates of input cost inflation in the past three years.
• Currently, TYZ5 trades +12 at 113-08 vs. -14 high, a bullish development and suggests scope for a climb towards 113-18+, the Oct 28 high. Note that the move high also cancels a recent short-term bearish theme. Key support to watch is 112-06, the Sep 25 low. Trendline support, drawn from the May 22 low, lies at 112-08.
• Stocks are extending highs late Friday - apparently reacting to headlines that the the WH is "internally floating" sales of high-end Nvidia H200 chips to China - that are currently embargoed by the Trump admin to make it more difficult to further develop AI.

OVERNIGHT DATA

MNI US DATA: UMichigan: Inflation Expectations Softens Amid Recessionary Sentiment

The final University of Michigan consumer survey for November represented an upgrade from the preliminary readings on overall sentiment with inflation expectations showing continuing signs of moderation at a high level. However, current conditions fell to an even poorer level than the all-time worst recorded in the preliminary survey, with extremely pessimistic sentiment regarding the labor market, signaling that consumer conditions remain weak.

• Regarding the upgrade to the headline sentiment reading (51.0, lowest since June 2022) from the prelim (50.3), the report notes: "Following the end of the federal shutdown, sentiment lifted slightly from its mid-month reading. However, consumers remain frustrated about the persistence of high prices and weakening incomes."

MNI US DATA: Flash PMIs Point To Faster Growth and Input Cost Inflation

The S&P Global US PMIs were on balance stronger than expected in the flash November release, led by services increasing slightly whilst manufacturing fell a little more than expected. Overall activity saw the largest rise in new business seen so far this year whilst selling prices reaccelerated on the back of one of the fastest rates of input cost inflation in the past three years. Composite output price inflation however is still lower than earlier this year. 

• S&P Global US manufacturing PMI: 51.9 (cons 52.0) after 52.5 in October
• S&P Global US services PMI: 55.0 (cons 54.6) after 54.8 in October
• S&P Global US composite PMI: 54.8 (cons 54.5) after 54.6 in October

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA up 623.15 points (1.36%) at 46375.77
S&P E-Mini Future up 92.25 points (1.41%) at 6650
Nasdaq up 345.3 points (1.6%) at 22422.51
US 10-Yr yield is down 2.3 bps at 4.0613%
US Dec 10-Yr futures are up 11.5/32 at 113-7.5
EURUSD down 0.0015 (-0.13%) at 1.1513
USDJPY down 1.08 (-0.69%) at 156.38
Gold is up $5.5 (0.13%) at $4082.35

European bourses closing levels:
EuroStoxx 50 down 54.83 points (-0.98%) at 5515.09
FTSE 100 up 12.06 points (0.13%) at 9539.71
German DAX down 186.98 points (-0.8%) at 23091.87
French CAC 40 up 1.58 points (0.02%) at 7982.65

US TREASURY FUTURES CLOSE

Curve update: 
3M10Y +0.909, 22.191 (L: 17.691 / H: 24.247)
2Y10Y -0.42, 54.543 (L: 53.599 / H: 56.246)
2Y30Y +1.099, 119.807 (L: 117.191 / H: 121.652)
5Y30Y +1.998, 109.463 (L: 106.241 / H: 110.354)
Current futures levels:
Dec 2-Yr futures up 2.5/32 at 104-8.25 (L: 104-05.75 / H: 104-10.25)
Dec 5-Yr futures up 7.25/32 at 109-19.5 (L: 109-13 / H: 109-23.75)
Dec 10-Yr futures up 11.5/32 at 113-7.5 (L: 112-29.5 / H: 113-14) 
Dec 30-Yr futures up 9/32 at 117-6 (L: 116-28 / H: 117-22)
Dec Ultra futures up 10/32 at 120-15 (L: 120-03 / H: 121-02)

MNI US 10YR FUTURE TECHS: (Z5) Clears Resistance

• 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: 113-10+ Intraday high
• PRICE:‌‌ 113-05 @ 1200 ET Nov 21
• SUP 1: 112-11/08 100-dma / Trendline drawn from the May 22 low
• SUP 2: 112-06   Low Sep 25 and a key support
• SUP 3: 111-31   Low Sep 2
• SUP 4: 111-23   50.0% retracement of the May 22 - Oct 17 bull leg 

Treasuries have cleared resistance at 113-02, an area of congestion since Nov 5. The clear breach of this hurdle marks a bullish development and suggests scope for a climb towards 113-18+, the Oct 28 high. Note that the move high also cancels a recent short-term bearish theme. Key support to watch is 112-06, the Sep 25 low. Trendline support, drawn from the May 22 low, lies at 112-08.

SOFR FUTURES CLOSE

Current White pack (Dec 25-Sep 26):
Dec 25 +0.043 at 96.223
Mar 26 +0.025 at 96.445
Jun 26 +0.035 at 96.715
Sep 26 +0.040 at 96.895
Red Pack (Dec 26-Sep 27) +0.045 to +0.050
Green Pack (Dec 27-Sep 28) +0.050 to +0.055
Blue Pack (Dec 28-Sep 29) +0.050 to +0.055
Gold Pack (Dec 29-Sep 30) +0.055 to +0.055

REFERENCE RATES
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US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 3.91% (+0.00), volume: $3.170T
• Broad General Collateral Rate (BGCR): 3.86% (-0.01), volume: $1.276T
• Tri-Party General Collateral Rate (TCR): 3.86% (-0.01), volume: $1.253T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 3.88% (+0.00), volume: $75B
• Daily Overnight Bank Funding Rate: 3.88% (+0.00), volume: $179B

FED Reverse Repo Operation

RRP usage slips to $2.503B with 12 counterparties this afternoon from $6.520B Thursday. Compares to Tuesday's $0.905B - lowest level since mid-March 2021; this years highest excess liquidity measure: $460.731B on June 30.

MNI BONDS: EGBs-GILTS CASH CLOSE: Bull Steepening Week Ends With Bull Flattening

European curves bull flattened to end the week.

• Bunds and Gilts hit session highs in morning trade, as equities continued to lose ground overnight, fueling a safe haven bid.
• Adding to the bullish impetus for Gilts was soft UK services PMI data, though retail sales and public sector borrowing data had little impact.
• Gains faded toward the cash close, however, with equities finding a footing and oil prices ticking higher.
• For the week, the UK curve bull steepened partly on the back of softer-than-expected data (2Y yield -7.0bp, 10Y -2.8bp), with the German curve doing likewise but to a much lesser extent (2Y -2.2bp, 10Y -1.7bp).
• Periphery/semi-core EGB spreads were little changed on the day.
• Attention after hours will be on Moody's potential reviews of Italy and the UK, and Scope on Spain.
• Focus for next week will be on the UK Budget (MNI Preview here), while we also get country-level flash November inflation data from Germany, France, Italy and Spain.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.5bps at 2.014%, 5-Yr is down 0.9bps at 2.286%, 10-Yr is down 1.3bps at 2.703%, and 30-Yr is down 1bps at 3.339%.
• UK: The 2-Yr yield is down 1.7bps at 3.776%, 5-Yr is down 2.9bps at 3.961%, 10-Yr is down 4bps at 4.546%, and 30-Yr is down 5.8bps at 5.365%.
• Italian BTP spread down 0.1bps at 75.6bps / Spanish down 0.3bps at 50.6bps

MNI FOREX: Dovish Williams Stabilises Risk, USD Index Consolidates Weekly Advance

• The FX session has been characterised by the Japanese yen rising on Friday, halting an impressive run of weakness that has seen it fall around 6% against the dollar since the Japanese election.
• Today’s USDJPY weakness may have initially been driven by the pair finally succumbing to the broader risk sentiment, with like profit taking dynamics assisting the correction ahead of the weekend. Spot currently resides at 156.50, roughly 130 pips from Thursday’s cycle high at 157.89.
• Given the consistent verbal jawboning in recent weeks, we would expect similar FX rhetoric from MOF officials to continue given the rapid extension lower for the Yen this week. BOJ Governor Ueda’s speech on Dec 1 will be crucial for determining the probability of a rate hike in December.
• Elsewhere, the USD index remains at elevated levels, consolidating close to today’s recovery highs of 100.40. A break above 100.48 (May 29 high) would be a broader bullish development for the dollar. Fed’s Williams appeared to put the top in as he placed a dovish lens over the last monetary policy meeting of the year, however, greenback resilience has been a constant theme this week, with the DXY rising 1%.
• Amid the greenback strength, there has been mixed performance across G10, with the Euro relatively underperforming, while the late bounce for stocks has buoyed the likes of AUD, NZD and GBP.
• For GBPUSD, spot has rallied back to 1.31, leaving the pair around 90 pips above the cycle lows ahead of next week’s UK budget. Sterling still spears vulnerable, with bearish technical conditions intact. Below 1.30, market participants will look to 1.2945 (50.0% retracement of the Jan 13 - Jul 1 bull leg), before the more notable lows from April, at 1.2709.

MONDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
24/11/2025	0900/1000	***	DE	IFO Business Climate Index
24/11/2025	1100/1200		EU	ECB Cipollone Presentation at Cassa Depositi e Prestiti
24/11/2025	1245/1345		EU	ECB Elderson Keynote on Climate & Supervision
24/11/2025	1330/0830	*	CA	Quarterly financial statistics for enterprises
24/11/2025	1400/1500	**	BE	BNB Business Confidence
24/11/2025	1445/1545		EU	ECB Lagarde Keynote on AI & Education
24/11/2025	1530/1030	**	US	Dallas Fed manufacturing survey
24/11/2025	1630/1130	*	US	US Treasury Auction Result for 26 Week Bill
24/11/2025	1630/1130	*	US	US Treasury Auction Result for 13 Week Bill
24/11/2025	1800/1300	*	US	US Treasury Auction Result for 2 Year Note