MNI ASIA OPEN: Fed Gov Cook to Challenge Trump's Firing

EXECUTIVE SUMMARY

• MNI FED: Trump: Could Switch Miran To Longer-Term Board Position
• MNI Federal Reserve Statement: Governors Can Only Be Removed "For Cause"
• MNI SECURITY: US To Provide Battlefield Oversight For Ukraine 'Security Blanket'
• MNI US DATA: Something For Everyone In Philly Survey, But Inflationary Either Way
• MNI US DATA: Solid Start To Q3 For Durable Goods Activity

US

MNI FED: Trump: Could Switch Miran To Longer-Term Board Position

The dollar dips slightly as President Trump appears to suggest in a cabinet meeting press conference that the administration could nominate Stephen Miran to "fired" Governor Cook's Board position (expiring in 2038), instead of ex-Gov Kugler's vacant spot (whose term ends in January before requiring renewal). He also makes it clear the he is looking to have a "majority" on the Fed Board "very shortly", with the aim to bring down interest rates:

MNI Federal Reserve Statement: Governors Can Only Be Removed "For Cause"

A Federal Reserve statement addressing the Gov Cook situation indicates that the Fed's position is that Board Governors can only be removed "for cause", and that while Cook "will promptly challenge this action in court and seek a judicial decision that would confirm her ability to continue to fulfill her responsibilities", the Fed will "abide by any court decision". 

NEWS

MNI SECURITY: US To Provide Battlefield Oversight For Ukraine 'Security Blanket'

The Financial Times reports that the US has said it is, “prepared to provide intelligence assets and battlefield oversight to any western security blanket for postwar Ukraine and take part in a European-led air defence shield for the country, European and Ukrainian officials said.” According to FT, “Trump told European leaders last week America would be part of “co-ordination” of security guarantees for postwar Ukraine, something Kyiv has demanded to deter a future attack from Russia after any peace deal.”

MNI SECURITY: Russia Advances Into Dnipropetosvk Oblast As Ceasefire Momentum Stalls

Christopher Miller, the Financial Times' Ukraine correspondent, reports on X: "Russian forces have seized control of two villages in Ukraine's Dnipropetrovsk oblast – Zaporizke and Novoheorhiivka – making them the first villages in that region to fall to Russia," per Ukrainian war tracking group Deepstate UA.

US TSYS

MNI US TSYS: Fed Board Majority Goal Sees Tsy Curves Twist Steeper

• Treasuries look to finish mixed Tuesday, curves twisting steeper (2s10s +2.75 at 57.695; 5s30s +6.248 at 116.532) with 2s-10s near late session highs vs. weaker Bonds.
• Markets continued to digest Trump's unprecedented "firing" of Fed Gov Cook late Monday, projected rate cuts rising as Trump works toward a majority on the Fed Board in the near term. The Fed responded that Fed Govs can only be removed "for cause" while Cook moves to challenge the decision in court.
• The dollar dips slightly as President Trump appears to suggest in a cabinet meeting press conference that the administration could nominate Stephen Miran to "fired" Governor Cook's Board position (expiring in 2038), instead of ex-Gov Kugler's vacant spot (whose term ends in January before requiring renewal).
• Treasury futures had pared gains briefly after higher than expected Durable/Cap Goods Orders, Philadelphia Fed Non-Mfg Activity declines. Headline durable goods orders bested expectations at -2.8% M/M (-3.8% expected, -9.4% prior), weighed down once again by the extremely volatile nondefense aircraft orders category (-33% M/M, after -53% prior).
• Meanwhile, core shipments continued to hum along, rising by a 27-month high 0.7% M/M (0.2% expected, 0.4% prior rev from 0.3%).
• Heavy futures volumes (Sep'25 5s &10s near 3.5-4M) tied to Sep-Dec rolling ahead of Friday's "first notice" when Dec'25 will take the lead quarterly position. Light data ahead on Wednesday with MBA Mortgage Applications.

OVERNIGHT DATA

MNI US DATA: Solid Start To Q3 For Durable Goods Activity

Durable goods orders showed a pickup in July, with better revisions casting a slightly better light on goods production and business equipment investment this summer. Headline durable goods orders bested expectations at -2.8% M/M (-3.8% expected, -9.4% prior), weighed down once again by the extremely volatile nondefense aircraft orders category (-33% M/M, after -53% prior). Meanwhile, core shipments continued to hum along, rising by a 27-month high 0.7% M/M (0.2% expected, 0.4% prior rev from 0.3%).

MNI US DATA: Something For Everyone In Philly Survey, But Inflationary Either Way

The Philly Fed non-manufacturing survey pointed to a stagflationary environment when taking firms' views on the regional economy or an outright inflationary environment when focusing on their own firm-level activity. Own-level activity and new orders increased to their highest since Mar 2022 whilst prices received saw their highest since December. The Philly Fed non-manufacturing index slipped to -17.5 in August from -10.3 in July after the latter had been its least negative since January.

MNI US DATA: Redbook Retail Sales Remain Solid Into Late August, Tariff Impacts Seen

Retail sales remained robust into late August, with the Johnson Redbook index up 6.5% in the week ending Aug 23, after 5.9% the prior week. That brings month-to-date sales growth to 6.0% Y/Y, getting closer to retailers' targeted 6.2%.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA up 94.95 points (0.21%) at 45351.05
S&P E-Mini Future up 21.75 points (0.34%) at 6471.5
Nasdaq up 77 points (0.4%) at 21498.51
US 10-Yr yield is down 2.1 bps at 4.2537%
US Sep 10-Yr futures are up 8/32 at 112-7
EURUSD up 0.0028 (0.24%) at 1.1646
USDJPY down 0.44 (-0.3%) at 147.37
WTI Crude Oil (front-month) down $1.5 (-2.31%) at $63.29
Gold is up $24.96 (0.74%) at $3390.31

European bourses closing levels:
EuroStoxx 50 down 60.28 points (-1.11%) at 5383.68
FTSE 100 down 55.6 points (-0.6%) at 9265.8
German DAX down 120.25 points (-0.5%) at 24152.87
French CAC 40 down 133.23 points (-1.7%) at 7709.81

US TREASURY FUTURES CLOSE

3M10Y -0.922, 6.521 (L: 4.08 / H: 10.932)
2Y10Y +2.327, 57.272 (L: 54.345 / H: 59.775)
2Y30Y +5.786, 122.196 (L: 115.895 / H: 124.826)
5Y30Y +5.87, 116.154 (L: 110.155 / H: 117.534)
Current futures levels:
Sep 2-Yr futures up 2.75/32 at 103-30.125 (L: 103-27.25 / H: 103-30.5)
Sep 5-Yr futures up 6.75/32 at 109-3.75 (L: 108-27.5 / H: 109-04.5)
Sep 10-Yr futures up 8/32 at 112-7 (L: 111-25.5 / H: 112-07.5)
Sep 30-Yr futures down 4/32 at 114-19 (L: 113-29 / H: 114-26)
Sep Ultra futures down 10/32 at 117-1 (L: 116-09 / H: 117-14)

MNI US 10YR FUTURE TECHS: (U5) Trend Needle Points North

• RES 4: 113-23   76.4% retracement of the Sep’24 - Jan’25 sell-off
• RES 3: 113-07   76.4% retracement of the Apr 7 - 11 sell-off
• RES 2: 112-23   High May 1
• RES 1: 112-15+ High Aug 5 and the bull trigger
• PRICE:‌‌ 111-29+ @ 11:33 BST Aug 26
• SUP 1: 111-13+ 50-day EMA
• SUP 2: 110-23+/08+ Low Aug 1 / Low Jul 15 & 16
• SUP 3: 110-03   76.4% retracement of the May 22 - Jul 1 bull leg
• SUP 4: 109-28   Low Jun 6 and 11 

A bullish theme in Treasury futures remains intact and the contract continues to trade above support at the 50-day EMA, at 111-13+. A clear break of this average would expose support at 110-23+, the Aug 1 low. For bulls, sights are on 112-15+, the Aug 5 high and the bull trigger. Clearance of this hurdle would resume the uptrend and pave the way for a climb towards 112-23 initially, the May 1 high.

SOFR FUTURES CLOSE

Current White pack (Sep 25-Jun 26):
Sep 25 +0.015 at 95.898
Dec 25 +0.030 at 96.230
Mar 26 +0.045 at 96.485
Jun 26 +0.065 at 96.750
Red Pack (Sep 26-Jun 27) +0.055 to +0.070
Green Pack (Sep 27-Jun 28) +0.055 to +0.055
Blue Pack (Sep 28-Jun 29) +0.045 to +0.055
Gold Pack (Sep 29-Jun 30) +0.030 to +0.040

REFERENCE RATES (PRIOR SESSION)
​​​​​​​
US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 4.37% (+0.01), volume: $2.825T
• Broad General Collateral Rate (BGCR): 4.35% (+0.00), volume: $1.153T
• Tri-Party General Collateral Rate (TCR): 4.35% (+0.00), volume: $1.121T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $113B
• Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $236B

FED Reverse Repo Operation

RRP usage retreats to $28.574B this afternoon from $47.567B yesterday -- compares to $22.344B on Tuesday, Aug 19 - lowest since April 5, 2021. Total number of counterparties at 16. This year's high usage of $460.731B on June 30.

MNI PIPELINE: Corporate Bond Roundup: Ontario 5Y SOFR Rolled to Wednesday

• Date $MM Issuer (Priced *, Launch #)
• 08/26 $1B #OCBC 10NC5 +80
• 08/26 $1B #Bank Saudi Fransi 10NC5 +200
• 08/26 $800M #Sempra 30.5NC5.25 6.375%
• 08/26 $500M #BOC Aviation 5.5Y +58
• 08/26 $500M #Mitsui & Co 5Y +63
• 08/26 $500M JERA Co 5Y +78
• Expected Wednesday:
• 08/27 $2B ESM 2030 WNG +42a
• 08/27 $Benchmark Ontario 5Y SOFR +54a

MNI BONDS: EGBs-GILTS CASH CLOSE: OAT/Bund Spread Continues To Widen On Politics

OATs remained under pressure Tuesday as political risk concerns remained prevalent.

• The OAT/Bund spread widening initiated Monday by PM Bayrou's call for a confidence on his own government (to be held Sep 8) continued, with speculation that President Macron could have to call another set of legislative elections.
• French yields actually closed lower on the day, but the 10Y yield touched its highest level (3.534%) since March before recovering. 10Y OAT/Bund closed at 77.3bp, the widest since April 11 and up over 7bp this week.
• Elsewhere, French consumer confidence came in on the weak side, while BOE's Mann in a speech appeared to rule out any further rate cuts in the short-term.
• The German curve bull steepened, with the UK's bear steepening (the underperformance in cash being due to a catch-up from bank holiday market closure). Periphery EGB spreads widened modestly.
• Wednesday's schedule is on the light side, with German GfK consumer confidence and UK CBI Sales data, with main focus remaining on flash August Eurozone inflation later in the week.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 3.7bps at 1.938%, 5-Yr is down 4.7bps at 2.268%, 10-Yr is down 3.4bps at 2.723%, and 30-Yr is down 1.2bps at 3.32%.
• UK: The 2-Yr yield is up 2.4bps at 3.968%, 5-Yr is up 3.8bps at 4.139%, 10-Yr is up 4.7bps at 4.74%, and 30-Yr is up 6bps at 5.608%.
• Italian BTP spread down 0.5bps at 83.3bps / French OAT up 5.1bps at 77.3bps  

MNI FOREX: USD Index Consolidates Moderate Weakness After Trump-Cook Inspired Vol

• Headlines surrounding the uncertain future for Fed Governor Lisa Cook inspired some sharp two-way flows for the dollar early Tuesday, with the initial dip finding solid demand. Second-tier US data in the form of durable goods and consumer confidence beat expectations, however, a weaker labour differential and the stable session for equities has allowed the greenback to consolidate at moderately weaker levels on the session.
• USDJPY’s intra-day range has been contained within 147.00-148.00, comfortably within the short-term parameters established following Powell’s Jackson Hole remarks. Clearance of the bear trigger at 146.21 (Aug 14 low) would reinstate a downtrend, however, a resumption of gains would instead open 149.12, 61.8% of the Aug 1 - 14 bear leg.
• Despite a 0.3% bounce today, EURUSD remains lower on the week as political uncertainty has ratcheted up following French Prime Minister Francois Bayrou’s plan to call a confidence vote. The trend set-up in EURUSD remains bullish and short-term weakness is for now considered corrective. Support at the 50-day EMA remains intact, at 1.1597. A clear break of it would signal scope for a deeper retracement and potentially expose key support at 1.1392, the Aug 1 low.
• Ahead of the UK Budget (likely late October/early November), vols are recovering off seasonal lows: EUR/GBP 3m implied vols have recovered the entirety of the early August dip - with EUR, USD vols also improving.
• The 30-min candle chart shows EUR/GBP testing the nascent uptrend drawn off the late May lows of 0.8356. The level, today at 0.8624-0.8627, has been tested, and a break below could mark a resumption of the fade off 0.8769, opening 0.8508 in the short-term.
• Australia July CPI headlines a quiet schedule on Wednesday, before the market turns its attention to US GDP & PCE later in the week, as well as Eurozone inflation prints.  

WEDNESDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
27/08/2025	0600/1400	**	CN	MNI China Money Market Index (MMI)
27/08/2025	0600/0800	*	DE	GFK Consumer Climate
27/08/2025	0900/1000	**	GB	Gilt Outright Auction Result
27/08/2025	1000/1100	**	GB	CBI Distributive Trades
27/08/2025	1100/0700	**	US	MBA Weekly Applications Index
27/08/2025	1430/1030	**	US	DOE Weekly Crude Oil Stocks
27/08/2025	1430/1030	**	US	US DOE Petroleum Supply
27/08/2025	1530/1130	**	US	US Treasury Auction Result for 2 Year Floating Rate Note
27/08/2025	1700/1300	*	US	US Treasury Auction Result for 5 Year Note
28/08/2025	0130/1130	*	AU	Private New Capex and Expected Expenditure