MNI ASIA OPEN: Focus Turns to Jackson Hole Economic Symposium

EXECUTIVE SUMMARY

• MNI FED: MNI 2025 Jackson Hole Preview
• MNI FED: July FOMC Minutes: Cautious On Inflation Risks
• MNI: Fed Well-Placed To Assess Two-Way Risks - July Minutes
• MNI US DATA: Firms’ Unit Cost Expectations Hold Recent Moderation – Atlanta Fed

US

MNI FED: July FOMC Minutes: Cautious On Inflation Risks

In keeping with a divided Committee, the July meeting minutes contained slightly mixed messages about the FOMC's view of the outlook for inflation, labor market, and ultimately policy. But overall the minutes were more cautious about inflation than the labor market, and the key passage - which appears to have generated a slightly hawkish market reaction - is "participants generally pointed to risks to both sides of the Committee's dual mandate, emphasizing upside risk to inflation and downside risk to employment. A majority of participants judged the upside risk to inflation as the greater of these two risks, while several participants viewed the two risks as roughly balanced, and a couple of participants considered downside risk to employment the more salient risk." 

MNI: Fed Well-Placed To Assess Two-Way Risks - July Minutes

MNI FED: MNI 2025 Jackson Hole Preview

MNI's Markets Team has released a preview of this year's Jackson Hole symposium, including all the latest inter-meeting Fed commentary and our updated Hawk-Dove spectrum: Download Full Report Here

NEWS

MNI US: Trump Considering Firing Fed's Cook for Cause, According to Sources

Bloomberg reported President Trump "has told aides he is considering attempting to fire a Biden-appointed Federal Reserve governor after one of his housing officials accused her of mortgage fraud, according to a senior White House official and another person familiar with the matter."

MNI RUSSIA: Lavrov-Russia Ready To Discuss Political Aspects Of Settlement w/Ukraine

Russian state media is carrying comments from Foreign Minister Sergey Lavrov, who is speaking in Moscow after a meeting with his Jordanian counterpart Ayman al-Safadi. Regarding the war in Ukraine, Lavrov claims that Russia "is ready to work on Ukraine in any format, with the understanding that the work will be honest." Reuters reports Lavrov saying Russia is "ready to discuss the political aspects of the settlement with Ukraine".

US TSYS

MNI US TSYS: Digesting Mixed Messaging From July FOMC Minutes

• Treasuries look to finish modestly higher Wednesday, off midday highs after slightly mixed messaging from the July FOMC minutes regarding the inflation outlook, labor market, and ultimately policy.
• Tsy Sep'25 10Y contract trades +4 at 111-28.5 after the bell vs. 112-00.5 high, Initial technical support well below at 111-11 (50-day EMA); resistance above at 112-15.5 (High Aug 5 and the bull trigger). Curves mixed: 2s10s -1.699 at 53.911, 5s30s +.196 at 108.438.
• A majority of participants judged the upside risk to inflation as the greater of these two risks, while several participants viewed the two risks as roughly balanced. "Almost all participants viewed it as appropriate to maintain the target range for the federal funds rate at 4.25% to 4.5%".
• Limited data: MBA composite mortgage applications edged -1.4% (sa) lower last week to hold onto most of its refi-driven 11% increase the week prior. Indeed, new purchase applications increased 0.1% after 1.4% whilst refis dipped -3.1% after 23.0%.
• DJIA index staged a late session rebound while Nasdaq traded weaker - weighed by chip stocks amid reports the Trump admin "may seek equity in any such firms awarded federal grants under the Biden-era CHIPS Act."
• The Greenback see-sawed lower (BBDXY -.35 at 1206.64) adopting a more neutral position headed into Friday's Jackson Hole appearance from Chair Powell.

OVERNIGHT DATA

MNI US DATA: Mortgage Applications Hold Onto Most Of Refi Boost

• MBA composite mortgage applications edged -1.4% (sa) lower last week to hold onto most of its refi-driven 11% increase the week prior. Indeed, new purchase applications increased 0.1% after 1.4% whilst refis dipped -3.1% after 23.0%.

MNI US DATA: Firms’ Unit Cost Expectations Hold Recent Moderation – Atlanta Fed

The Atlanta Fed’s Business Inflation Expectations survey saw a second month having pared but not fully reversed tariff-driven increases whilst firms’ own-price expectations reversed a sizeable increase seen the previous quarter. 1Y ahead inflation expectations from the regular monthly survey, defined as the mean expected change in unit costs, were near unchanged in August at 2.26% after 2.29% in July. That’s after easing in the three previous months from a recent peak of 2.76% in April.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA up 9.7 points (0.02%) at 44923.16
S&P E-Mini Future down 19.25 points (-0.3%) at 6412.5
Nasdaq down 144.1 points (-0.7%) at 21169.63
US 10-Yr yield is down 2.1 bps at 4.2848%
US Sep 10-Yr futures are up 4.5/32 at 111-29
EURUSD up 0.0006 (0.05%) at 1.1653
USDJPY down 0.32 (-0.22%) at 147.34
WTI Crude Oil (front-month) up $0.86 (1.38%) at $63.21
Gold is up $32.96 (0.99%) at $3348.73

European bourses closing levels:
EuroStoxx 50 down 10.96 points (-0.2%) at 5472.32
FTSE 100 up 98.92 points (1.08%) at 9288.14
German DAX down 146.1 points (-0.6%) at 24276.97
French CAC 40 down 6.05 points (-0.08%) at 7973.03

US TREAURY FUTURES CLOSE

3M10Y -2.868, 6.624 (L: 5.331 / H: 10.048)
2Y10Y -1.699, 53.911 (L: 53.701 / H: 56.655)
2Y30Y -1.289, 114.504 (L: 113.23 / H: 117.937)
5Y30Y +0.196, 108.438 (L: 106.749 / H: 110.574)
Current futures levels:
Sep 2-Yr futures up 0.75/32 at 103-27 (L: 103-25.625 / H: 103-28.75)
Sep 5-Yr futures up 2.25/32 at 108-26.25 (L: 108-21.75 / H: 108-29.25)
Sep 10-Yr futures up 4/32 at 111-28.5 (L: 111-20 / H: 112-00.5)
Sep 30-Yr futures up 8/32 at 114-19 (L: 114-00 / H: 114-23)
Sep Ultra futures up 6/32 at 117-10 (L: 116-22 / H: 117-16)

MNI US 10YR FUTURE TECHS: (U5) Outlook Remains Bullish

• 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+ @ 11:12 BST Aug 20
• SUP 1: 111-11   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. The contract continues to trade above support at the 50-day EMA, at 111-.11. A clear break of this average would expose support at 110-23+, the Aug 1 low. For bulls, a resumption of gains would refocus attention on 112-15+, the Aug 5 high and bull trigger. A break 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

Sep 25 -0.013 at 95.890
Dec 25 -0.005 at 96.205
Mar 26 +0.005 at 96.435
Jun 26 +0.020 at 96.670
Red Pack (Sep 26-Jun 27) +0.015 to +0.025
Green Pack (Sep 27-Jun 28) +0.015 to +0.015
Blue Pack (Sep 28-Jun 29) +0.015 to +0.015
Gold Pack (Sep 29-Jun 30) +0.015 to +0.020

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

• Secured Overnight Financing Rate (SOFR): 4.33% (-0.01), volume: $2.760T
• Broad General Collateral Rate (BGCR): 4.31% (-0.02), volume: $1.144T
• Tri-Party General Collateral Rate (TCR): 4.31% (-0.02), volume: $1.118T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $109B
• Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $260B

FED Reverse Repo Operation

RRP usage rebounds to $34.999B this afternoon from $22.344B yesterday - lowest since April 5, 2021. Total number of counterparties at 29. This week's retreat compares this year's high usage of $460.731B on June 30.

MNI PIPELINE: Corporate Bond Update: $3B ADB & $3B British Columbia Priced Earlier

• Date $MM Issuer (Priced *, Launch #)
  • 08/20 $3B *ADB 5Y SOFR+39
  • 08/20 $3B *British Columbia 5Y SOFR+53 (books were over $8.7B)
  • 08/20 $1B #Nordea Bank $600M 5Y +50, $400M 5Y SOFR+83
  • 08/20 $600M #Athene Global 10Y +125
• Expected Thursday:
  • 08/20 $1B Nordic Investment Bank WNG 3Y SOFR+34
  • 08/20 $Benchmark Quebec 10Y SOFR+90a

MNI BONDS: EGBs-GILTS CASH CLOSE: Gilts Gain, Shrugging Off Firm UK CPI

EGBs and Gilts rallied Wednesday.

• Gilts outperformed despite UK inflation data coming out on the firmer side of expectations. MNI's Markets Team saw little in the way of "game-changing" information in the report in terms of the BOE's approach to policy, with headline inflation just 7 hundredths above the BOE's forecast at 3.83%Y/Y in July (MNI median 3.7%, BOE 3.76%, 3.58% in June) and much of the upside surprise driven by volatile airfares/accommodation prices.
• Yields descended through much of the session from there, with a further firming notable in Bunds in mid-afternoon as US tech stocks dipped sharply (albeit without any headline trigger).
• In other data, Eurozone final HICP showed marginal upward revisions to the core and services measures.
• Meanwhile, ECB's Lagarde said that uncertainty has been "alleviated, but certainly not eliminated" though this had little impact on rate pricing.
• On the day, the belly outperformed on the German curve, while the UK curve bull flattened. Periphery/semi-core spreads to Bunds closed little changed.
• Thursday's schedule includes flash August PMIs and UK public finance data.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 2.5bps at 1.933%, 5-Yr is down 3.3bps at 2.273%, 10-Yr is down 3.3bps at 2.717%, and 30-Yr is down 2.9bps at 3.294%.
• UK: The 2-Yr yield is down 5.8bps at 3.922%, 5-Yr is down 6.2bps at 4.076%, 10-Yr is down 6.8bps at 4.672%, and 30-Yr is down 7.1bps at 5.531%.
• Italian BTP spread up 0.3bps at 80.8bps /  French OAT up 1.2bps at 69.5bps

MNI FOREX: NZD Consolidates Sharp Move Lower Following Dovish RBNZ

• The New Zealand dollar has been under significant pressure Wednesday, after the RBNZ committee voted to reduce the OCR by 25bps to 3.00% and two members voted for a larger 50bp interest rate cut. NZDUSD extended the week’s depreciation, extending down to a four-month low of 0.5815.
• Exponential moving average studies have moved into a bear-mode position and today’s move through the May lows bolsters the short-term bearish momentum. The 50% and 61.8% retracements of the April-July price swing are the next notable support levels, located at 0.5803 and 0.5728 respectively.
• Additionally, EURNZD has risen back above the psychological 2.00 mark to trade at its highest level since 2010. A previous attempt above this level in April provided an abrupt top for the cross, before a swift 6% reversal ensued. Given the longer-term significance of current chart levels, EURNZD may be at an important inflection point. Should spot close above 2.00, momentum demand could signal scope for a much stronger rally, potentially targeting 2.1249, the 61.8% retracement of the 2009-2015 range.
• Higher-than-expected inflation data in the UK provided only momentary support for GBP, which then reversed steadily lower across the session. Leaving the UK with one of the highest core rates of inflation in the G10, market sentiment appeared to sour towards sterling. As such, GBPUSD looks set to extend its losing streak to three sessions, sliding back towards 1.3450 as we approach the APAC crossover.
• After creeping to a new weekly high at 98.44 overnight, the USD index slipped back into moderate negative territory on Wednesday. Markets appear to be adopting a more neutral position headed into Friday's Jackson Hole appearance from Chair Powell, while headlines from Trump calling for Fed Governor Cook’s resignation represent a developing risk to monitor. 

THURSDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
21/08/2025	0600/0700	***	GB	Public Sector Finances
21/08/2025	0600/0800	**	NO	Norway GDP
21/08/2025	0715/0915	**	FR	S&P Global Services PMI (p)
21/08/2025	0715/0915	**	FR	S&P Global Manufacturing PMI (p)
21/08/2025	0730/0930	**	DE	S&P Global Services PMI (p)
21/08/2025	0730/0930	**	DE	S&P Global Manufacturing PMI (p)
21/08/2025	0800/1000	**	EU	S&P Global Services PMI (p)
21/08/2025	0800/1000	**	EU	S&P Global Manufacturing PMI (p)
21/08/2025	0800/1000	**	EU	S&P Global Composite PMI (p)
21/08/2025	0830/0930	***	GB	S&P Global Manufacturing PMI flash
21/08/2025	0830/0930	***	GB	S&P Global Services PMI flash
21/08/2025	0830/0930	***	GB	S&P Global Composite PMI flash
21/08/2025	0900/1100	**	EU	Construction Production
21/08/2025	1000/1100	**	GB	CBI Industrial Trends
21/08/2025	1130/0730		US	Atlanta Fed's Raphael Bostic
21/08/2025	1230/0830	***	US	Jobless Claims
21/08/2025	1230/0830	**	US	WASDE Weekly Import/Export
21/08/2025	1230/0830	*	CA	Industrial Product and Raw Material Price Index
21/08/2025	1230/0830	**	US	Philadelphia Fed Manufacturing Index
21/08/2025	1345/0945	***	US	S&P Global Manufacturing Index (Flash)
21/08/2025	1345/0945	***	US	S&P Global Services Index (flash)
21/08/2025	1400/1000	***	US	NAR existing home sales
21/08/2025	1400/1000	*	US	Services Revenues
21/08/2025	1400/1600	**	EU	Consumer Confidence Indicator (p)
21/08/2025	1430/1030	**	US	Natural Gas Stocks
21/08/2025	1530/1130	**	US	US Bill 04 Week Treasury Auction Result
21/08/2025	1530/1130	*	US	US Bill 08 Week Treasury Auction Result
21/08/2025	1700/1300	**	US	US Treasury Auction Result for TIPS 30 Year Bond
22/08/2025	2301/0001	**	GB	Gfk Monthly Consumer Confidence
22/08/2025	2330/0830	***	JP	CPI