EXECUTIVE SUMMARY
US
MNI FED: Warsh - Smaller Fed Balance Sheet Would Help Economy
A smaller Federal Reserve balance sheet would benefit the economy by creating greater clarity about the central bank's main policy instrument and allowing officials to heed closer to traditional policy rules, former Fed Governor Kevin Warsh, a leading candidate to replace Fed Chair Powell at the central bank's helm, said Friday. "There are many benefits of a smaller balance sheet," Warsh said, including "better economic outcomes."
MNI FED: Bostic Supports No Rate Adjustment Amidst Uncertainty
Atlanta Fed’s Bostic (non-voter) offered post-FOMC thoughts in a post, echoing broader FOMC rhetoric that it’s not prudent to adjust rates with so much uncertainty. The economy should still be resilient but less so than we expected earlier this year. See his full remarks here. He supported the decision to leave rates on hold, citing the potential continuation of the current period of uncertainty. "Uncertainty is still pervasive in the economy, and business contacts tell my staff and me that they expect uncertainty to persist longer than they had anticipated earlier this year. I don't think it's prudent to adjust monetary policy with so little visibility of the path ahead."
MNI FED: Williams Echoes No Hurry To Cut Rates
NY Fed’s Williams (permanent voter) prepared remarks (here) focused on central bank credibility - the bedrock of central banking is anchored inflation expectations - but subsequent Q&A and a separate Bloomberg TV have offered some more color that suggests a similar stance to Powell. That’s of some note with Williams one of the most dovish members of the FOMC although we also see Powell as dovish leaning compared to the broader committee. In particular, there appears no rush to cut rates.
MNI FED: Kugler Sees It Most Likely That US Close To Maximum Employment
Fed Governor Kugler (permanent voter) views the labor market as stable and likely close to maximum employment, somewhat echoing Chair Powell on Wednesday saying “The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid”. Kugler’s full remarks on "Assessing Maximum Employment" can be found here.
MNI FED: Barr Sees Policy In Good Position But May Face Conflicting Dual Mandate
Fed Governor Barr (permanent voter) offers a similar stance to Chair Powell from Wednesday’s press conference, although appears a little more concerned about the prospects of facing conflicting dual mandate goals than Powell who said it’s “not one that we face today. And we may never face it. But, you know, we have to be keeping it in our thinking now.” Barr's full remarks on "Artificial Intelligence and the Labor Market: A Scenario-Based Approach" can be found here.
MNI STIR: Fed Rate Path Close To Recent Hawkish Extremes Before US-China Talks
NEWS
MNI TARIFFS: Navarro And Hassett Say UK Trade Deal Will Act As Template
US President Donald Trump’s senior trade advisor, Peter Navarro, told Bloomberg TV that the UK trade deal is “significant not just as a deal but a template for future deals.”
MNI TARIFFS: Switzerland Should Be In Line For US Trade Deal - Swiss President
Reuters carrying comments from Swiss President Karin Keller-Sutter talking up the prospect of striking a US-Swiss trade deal during US Treasury Secretary Scott Bessent’s visit to the country, where he will also hold talks with Chinese Vice Premier He Lifeng.
MNI UKRAINE: Zelenskyy Convenes 'Coalition Of The Willing' Leaders Summit For 10 May
Speaking virtually to the Joint Expeditionary Force (JEF) meeting in Oslo, Norway, Ukrainian President Volodymyr Zelenskyy says that there will be a summit of leaders from the 'Coalition of the Willing' tomorrow (Saturday, 10 May) in Kyiv. The JEF is a UK-founded group of 10 northern European countries (UK, Denmark, Estonia, Latvia, Lithuania, the Netherlands, Norway, Finland, Sweden, and Iceland) established in 2014 as a 'complement' to NATO.
MNI UKRAINE: RTRS-French Diplo: US & Europe Working On 30 Day Ceasefire Proposal
Reuters reporting comments from a French diplomatic source regarding the summit of the 'Coalition of the Willing' being hosted tomorrow (10 May) by Ukrainian President Volodymyr Zelenskyy in Kyiv. Says that Foreign Minister Jean-Noel Barrot is on his way to the Ukrainian capital to represent President Emmanuel Macron. Says that the US and European are working to put together a proposal for a 30-day Russia-Ukraine ceasefire. The leaders of the 'Coalition of the Willing' (UK PM Sir Keir Starmer and Macron) and US President Donald Trump have each put forward their own ideas for a month-long halt in hostilities, but it would appear that both sides are keen to get a single deal agreed to.
MNI JAPAN: Kyodo-Draft Defence White Paper: Sino-Russian Links A 'Grave Concern'
Kyodo News reports that a draft of the 2025 Defence White Paper, due to be presented to the cabinet as early as July, "criticises the strengthening of cooperation between China and Russia, including military activities, as "a grave concern for our national security." It points out that China and Russia are strengthening their capabilities to hinder other countries' use of space, and that there is a possibility that nations and militaries are involved in cyber attacks."
US TSYS
MNI US TSYS: Fed Speakers Echo Chairman Powell, No Hurry to Cut Rates
OVERNIGHT DATA
No data Friday, but multiple Fed speakers as outlined above.
MARKETS SNAPSHOT
Key market levels of markets in late NY trade:
DJIA down 91.41 points (-0.22%) at 41272.78
S&P E-Mini Future down 0.25 points (0%) at 5684
Nasdaq up 17.6 points (0.1%) at 17943.71
US 10-Yr yield is up 0.2 bps at 4.3804%
US Jun 10-Yr futures are down 0.5/32 at 110-25
EURUSD up 0.0021 (0.19%) at 1.1249
USDJPY down 0.56 (-0.38%) at 145.35
WTI Crude Oil (front-month) up $1.08 (1.8%) at $61.00
Gold is up $21.64 (0.65%) at $3327.31
European bourses closing levels:
EuroStoxx 50 up 20.8 points (0.39%) at 5309.74
FTSE 100 up 23.19 points (0.27%) at 8554.8
German DAX up 146.63 points (0.63%) at 23499.32
French CAC 40 up 49.31 points (0.64%) at 7743.75
US TREASURY FUTURES CLOSE
3M10Y +1.127, 5.513 (L: 1.798 / H: 7.081)
2Y10Y -0.271, 49.569 (L: 48.616 / H: 52.903)
2Y30Y -0.907, 95.562 (L: 94.66 / H: 100.914)
5Y30Y -0.957, 84.663 (L: 84.313 / H: 89.129)
Current futures levels:
Jun 2-Yr futures up 0.5/32 at 103-17.375 (L: 103-17.25 / H: 103-20.5)
Jun 5-Yr futures down 0.25/32 at 108-2 (L: 108-02 / H: 108-10)
Jun 10-Yr futures down 1/32 at 110-24.5 (L: 110-23.5 / H: 111-03)
Jun 30-Yr futures down 4/32 at 114-9 (L: 113-25 / H: 114-19)
Jun Ultra futures down 9/32 at 117-29 (L: 117-08 / H: 118-10)
MNI US 10YR FUTURE TECHS: (M5) Bear Cycle Extension
Treasury futures are off lows, but traded sharply lower Thursday, marking an extension of the bear cycle that started at the beginning of May. Recent weakness undermines a bullish theme. The contract has traded through the 50-day EMA, at 110-31+. A clear break of this average would strengthen a bearish threat and expose 110-16+, the Apr 22 low. For bulls, price needs to trade above key S/T resistance at 112-20+, the May 1 high, to reinstate a bullish theme.
SOFR FUTURES CLOSE
Jun 25 steady00 at 95.745
Sep 25 steady00 at 96.055
Dec 25 steady00 at 96.330
Mar 26 +0.005 at 96.535
Red Pack (Jun 26-Mar 27) +0.010 to +0.010
Green Pack (Jun 27-Mar 28) steady
Blue Pack (Jun 28-Mar 29) -0.005 to -0.005
Gold Pack (Jun 29-Mar 30) -0.01 to -0.005
REFERENCE RATES (PRIOR SESSION)
US TSYS: Repo Reference Rates
STIR: FRBNY EFFR for prior session:
FED Reverse Repo Operation
RRP usage inches up to $142.272B this afternoon from $139.768B yesterday, total number of counterparties at 31. Usage had fallen to $54.772B last Wednesday, April 16 -- lowest level since April 2021. Conversely, usage had surged to the highest level since December 31, 2024 on Monday, March 31: $399.167B.
MNI PIPELINE: Corporate Bond Roundup: $49B Issued This Week
$9.7B Priced Thursday, $49B total for the week:
MNI FOREX: USD Backtracks Thurs Gains, But Conviction Looks Light
MONDAY DATA CALENDAR
Date | GMT/Local | Impact | Country | Event |
12/05/2025 | 0500/1400 | ![]() | Economy Watchers Survey | |
12/05/2025 | 0800/0900 | ![]() | BOE Lombardelli At BOE Bank Watcher's Conference | |
12/05/2025 | 1030/1130 | ![]() | BOE Greene On Monetary policy outlook | |
12/05/2025 | - | *** | ![]() | Money Supply |
12/05/2025 | - | *** | ![]() | New Loans |
12/05/2025 | - | *** | ![]() | Social Financing |
12/05/2025 | - | ![]() | ECB's Cipollone At Eurogroup Meeting | |
12/05/2025 | 1250/1350 | ![]() | BOE Mann On Neutral Rate Of Interest | |
12/05/2025 | 1425/1025 | ![]() | Fed Governor Adriana Kugler | |
12/05/2025 | 1430/1530 | ![]() | DMO likely to publish FQ2 consultation agenda | |
12/05/2025 | 1530/1130 | * | ![]() | US Treasury Auction Result for 26 Week Bill |
12/05/2025 | 1530/1130 | * | ![]() | US Treasury Auction Result for 13 Week Bill |
12/05/2025 | 1600/1200 | *** | ![]() | USDA Crop Estimates - WASDE |
12/05/2025 | 1600/1700 | ![]() | BOE Taylor Fireside Chat With Ed Balls | |
12/05/2025 | 1800/1400 | ** | ![]() | Treasury Budget |
13/05/2025 | 2301/0001 | * | ![]() | BRC-KPMG Shop Sales Monitor |