MNI ASIA OPEN: Hassett Favors Greenspan's Approach to Economy
EXECUTIVE SUMMARY
- MNI FED: Gov Cook Saw July Jobs Report As "Concerning", Possible "Turning Point"
- MNI FED: Minneapolis's Kashkari: Could Cut Rates With Potential To Hold/Hike Later
- MNI FED: Chair Candidate Hassett: Fed Board Should Return To Greenspan's Approach
- MNI US DATA: Mortgage Applications Continue Rough Stabilization
US
MNI FED: Gov Cook Saw July Jobs Report As "Concerning", Possible "Turning Point"
Cumulative 2025 Fed rate cut pricing marginally extended to session highs (a little over 61bp, up 3bp on the day) as Fed Gov Cook notes that last week's Employment Report was "concerning" and could mark a "turning point... We just received this jobs market report and this is concerning, you know, 35,000 jobs per month over the last three months ending in July. And there were major revisions to May and June. And these revisions are somewhat typical of turning points, which again, speak to uncertainty."
MNI FED: Minneapolis's Kashkari: Could Cut Rates With Potential To Hold/Hike Later
Minneapolis Fed's Kashkari tells CNBC he's concerned about the trajectory of economic growth and says that his outlook for two rate cuts by year-end is still "reasonable" (he said in June that this implied a "possible first cut in September") though suggests that the Fed could reverse course if it turns out tariffs are too inflationary for comfort. Recall he is not a FOMC voter this year but is in 2026.
MNI FED: Chair Candidate Hassett: Fed Board Should Return To Greenspan's Approach
National Economic Council director Kevin Hassett tells Fox Business that Treasury Secretary Bessent is leading the search for the next Fed Chair. He says of his own candidacy, which was mentioned by President Trump on Tuesday, that "if there's a future challenge that comes my way, I'd be happy to talk to [Trump] about it." He reiterates that he thinks the Fed should be easing amid "low" inflation and the recent "negative news on unemployment".
NEWS
MNI TARIFFS: US' 25% India Tariff On Top Of 'Reciprocal' Levy, Imposed In 21 Days
The confirmation of a 25% tariff to be imposed on India by the US for its purchases of Russian oil (see 'TARIFFS: Trump to Impose Additional 25% Tariff on India', 15:00BST) will be applied on top of the 25% 'reciprocal' levy due to come into force on 7 August according to the White House. The statement confirms that the tariff announced today "shall be in addition to any other duties, fees, taxes, exactions, and charges applicable to such imports."
MNI INDIA: Modi To Visit China For First Time In 7 Years For SCO Summit
(MNI) London - Reuters reports that Prime Minister Narendra Modi will visit China for the first time in over seven years this autumn for the Shanghai Cooperation Organisation (SCO) summit. The summit gets underway in Tianjin on 31 August, and Modi's attendance will inevitably be viewed in the context of the increasing trade tensions between New Delhi and Washington, D.C.
MNI BRAZIL: Fin Min To Hold Call w/US' Bessent Next Week As To Tariffs Kick In
Reuters reports comments from Finance Minister Fernando Haddad stating that he has a call with US Treasury Secretary Scott Bessent scheduled for next week. Haddad says "We want to open negotiations with the US [and] normalise our relations." Haddad: "We will submit a contingency plan today to help firms affected by tariffs, [a] formal announcement [will come from] the president's office."
MNI SECURITY: Russia And US Sent 'Signals' In Putin-Witkoff Meeting - Kremlin
Reuters carrying comments from advisor to Russian President Vladimir Putin, Yuri Ushakov, on the recently concluded meeting between Putin and US President Donald Trump’s chief negotiator, Steve Witkoff, in Moscow. Ushakov described the meeting as “useful and constructive” and said both sides sent “signals” to the other: “From our side we have sent some signals. We have also received some signals from Trump.”
US TSYS
MNI US TSYS: Treasuries Reverse Midmorning Knee-Jerk Dive, 10Y Note Sale Tailed
- Treasuries look to finish near steady (FVU5 -.25) to mixed, curves steeper (2s10s +3.084 at 51.452) with the short end outperforming. Rates had gapped lower midmorning: TYU5 tapped 111-26.5 low before rebounding almost as quickly, not headline or Block driven though some 60k TYU traded over short period - deemed likely error driven.
- The Sep'25 10Y futures contract currently trades 112-07 (-2.5). Treasury futures remain strong on the back of the post-NFP rally having cleared resistance into the bull trigger at 112-12+, the Jul 1 high. This opens the May 1 high for direction at 112-23, a multi-month high. Clearance here opens retracement levels layered between 113-07 and 113-23.
- Speculation over whether Pres Trump will announce new Russia sanctions or nominees for Fed governor or BLS head, however, tethered risk appetites somewhat. Trump reportedly wants to meet with Putin and Zelenskiy next week sometime.
- Treasury futures retreated slightly (TYU5 -7 at 112-07.5, 4.2375% yld) after the $42B 10Y note auction (91282CNT4) tailed 1bp: drawing 4.255% high yield vs. 4.245% WI; 2.35x bid-to-cover vs. 2.61x prior.
- Limited midweek data, focus turns to ECB's economic bulletin tomorrow, US weekly jobless claims & unit labor costs, and latest Chinese trade balance numbers. Fed's Bostic expected to address monetary policy shortly after BoE rate decision.
OVERNIGHT DATA
MNI US DATA: Mortgage Applications Continue Rough Stabilization
Mortgage applications broadly stabilize as refis continue to slowly close the gap with new purchases. The more notable development is banks being increasingly willing to offer lower rates for jumbo mortgages. MBA composite mortgage applications increased 3.1% last (sa) to reverse the -3.8% the week prior. They’re back close to where they were in June after volatility in the first half of July before levelling off.
- New purchases applications continue their recent underperformance (1.5% after -5.8%) to refis (5.2% after -1.1%). Relative levels continue to tell a different story though, with composite applications at 54% of 2019 levels vs 61% for new purchases and 45% for refis.
- The 30Y conforming rate fell 6bps to 6.77% for its join lowest since early April.
MARKETS SNAPSHOT
Key market levels of markets in late NY trade:
DJIA up 101.36 points (0.23%) at 44211.81
S&P E-Mini Future up 47 points (0.74%) at 6371.25
Nasdaq up 241.6 points (1.2%) at 21156.69
US 10-Yr yield is up 1.4 bps at 4.2237%
US Sep 10-Yr futures are down 3.5/32 at 112-6
EURUSD up 0.0082 (0.71%) at 1.1657
USDJPY down 0.44 (-0.3%) at 147.18
WTI Crude Oil (front-month) down $1.21 (-1.86%) at $63.94
Gold is down $9.14 (-0.27%) at $3371.42
European bourses closing levels:
EuroStoxx 50 up 13.7 points (0.26%) at 5263.29
FTSE 100 up 21.58 points (0.24%) at 9164.31
German DAX up 78.29 points (0.33%) at 23924.36
French CAC 40 up 13.99 points (0.18%) at 7635.03
US TREASURY FUTURES CLOSE
3M10Y +1.941, -1.558 (L: -4.727 / H: 3.442)
2Y10Y +3.252, 51.62 (L: 48.34 / H: 54.666)
2Y30Y +5.266, 110.659 (L: 105.783 / H: 113.725)
5Y30Y +4.087, 104.163 (L: 100.399 / H: 105.991)
Current futures levels:
Sep 2-Yr futures up 0.375/32 at 103-30.125 (L: 103-28 / H: 103-31)
Sep 5-Yr futures down 1.25/32 at 109-0.5 (L: 108-27 / H: 109-02.25)
Sep 10-Yr futures down 3.5/32 at 112-6 (L: 111-26.5 / H: 112-08.5)
Sep 30-Yr futures down 20/32 at 115-16 (L: 114-11 / H: 115-31)
Sep Ultra futures down 27/32 at 118-25 (L: 117-18 / H: 119-14)
MNI US 10YR FUTURE TECHS: (U5) Holds Firm
- 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
- PRICE: 112-03+ @ 12:47 BST Aug 6
- SUP 1: 110-19+/08+ Low Jul 24 / Low Jul 14 & 16
- SUP 2: 110-03 76.4% retracement of the May 22 - Jul 1 bull leg
- SUP 3: 109-28 Low Jun 6 and 11
- SUP 4: 109.25 Low May 27
Treasury futures remain strong on the back of the post-NFP rally having cleared resistance into the bull trigger at 112-12+, the Jul 1 high. This opens the May 1 high for direction at 112-23, a multi-month high. Clearance here opens retracement levels layered between 113-07 and 113-23. On the downside, key support is 110-08+, the Jul 14 and 16 low. First support lies at 110-19+, the Jul 24 low.
SOFR FUTURES CLOSE
Sep 25 +0.005 at 95.940
Dec 25 +0.025 at 96.275
Mar 26 +0.025 at 96.505
Jun 26 +0.025 at 96.740
Red Pack (Sep 26-Jun 27) -0.01 to +0.015
Green Pack (Sep 27-Jun 28) -0.025 to -0.015
Blue Pack (Sep 28-Jun 29) -0.035 to -0.025
Gold Pack (Sep 29-Jun 30) -0.045 to -0.04
REFERENCE RATES (PRIOR SESSION)
US TSYS: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 4.34% (+0.01), volume: $2.863T
- Broad General Collateral Rate (BGCR): 4.33% (+0.02), volume: $1.167T
- Tri-Party General Collateral Rate (TCR): 4.33% (+0.02), volume: $1.137T
- (rate, volume levels reflect prior session)
STIR: FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $115B
- Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $268B
FED Reverse Repo Operation
RRP usage bounces to $91.966B this afternoon from $84.356B yesterday (lowest levels since April 25), total number of counterparties at 22. Lowest usage of the year at $54.772B on Wednesday, April 16 -- in turn the lowest level since April 2021 - compares to July 1: $460.731B highest usage since December 31.
MNI PIPELINE: Corporate Bond Update: $3B Oneok, $2.75B BMW Multi-Tranche Launched
- Date $MM Issuer (Priced *, Launch #)
- 08/06 $3B #Oneok $750M 7Y +103, $1B 10Y +122, $1.25B 30Y +147
- 08/06 $2.75B #BMW US $750M 2Y +50, $500M 2Y SOFR+71, $1B 5Y +75, $500M 10Y +100
- 08/06 $900M *American Water Capital 30Y +90
- 08/06 $700M Match Group 8NC3
- 08/06 $500M *PPL Electric WNG 30Y +77
- 08/06 $800M #Extra Space Storage +7Y +100
- Expected Thursday:
- 08/07 $1B Cloud Software Group 8NC3
MNI BONDS: EGBs-GILTS CASH CLOSE: Late Sell-Off Cements German Bear Steepening
European curves steepened Wednesday, with Bunds underperforming Gilts ahead of the BOE decision.
- Early trade saw modest bear steepening across the space, with German supply weighing on long-end Bunds.
- Yields began to rise in late afternoon but suddenly spiked less than 30 minutes before the European cash close on what some desks called an erroneous trade. While yields came back down, they closed well off their lows.
- German factory orders data were weaker than expected, compared with Italian industrial production which surprised to the upside and Eurozone retail sales which were largely in line. None of the data had any major market impact.
- The German curve bear steepened slightly on the day, with the UK's twist steepening. Periphery/semi-core EGB spreads closed mixed.
- Thursday's BOE decision is the calendar highlight of the week - MNI's preview is here.
- Along with the expected 25bp rate cut, focus will be
on the vote split, the tone of the press conference, any changes to assumptions in the scenarios and any signalling ahead of September’s QT decision.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is up 1bps at 1.918%, 5-Yr is up 2bps at 2.235%, 10-Yr is up 2.6bps at 2.65%, and 30-Yr is up 3.5bps at 3.173%.
- UK: The 2-Yr yield is down 0.5bps at 3.821%, 5-Yr is up 0.3bps at 3.959%, 10-Yr is up 1bps at 4.526%, and 30-Yr is up 2.1bps at 5.36%.
- Italian BTP spread down 0.4bps at 79.8bps / French OAT up 0.7bps at 66.6bps
MNI FOREX: USD Resumes Spell of Weakness on Fed Speculation, Technical Break
- The USD resumed the recent spell of weakness Wednesday, helping the ICE USD Index through the post-NFP low. Prices have also broken interim support at the 50-dma - a level that had drawn notable focus through the YTD downtrend and helped define the downtrend. EUR/USD topping the Friday high and layered resistance between 1.1597-00 further triggered USD selling.
- Interjections from potential next Fed chair Hassett helped weigh on the USD, as he voiced his support for a more Greenspan-like approach to policymaking, with a lesser focus on consensus-forming. This led markets to more quickly price in rates conforming to Trump's preference for easy policy. A later Bloomberg report that suggested Trump was being advised to appoint an interim Fed governor that can skip the Senate nomination process made little impact on pricing - although the expedited timeline could mean a new Trump appointee is installed ahead of the September rate decision.
- Resilient GBP/USD comes despite the NIESR estimates out earlier today that suggests the government are facing a more dire fiscal picture in Autumn than previously expected - suggesting markets are well priced for sharp spending cuts and/or tax rises at the next Budget. Instead, it's the BoE decision Thursday that could be of more consequence, and in particular the vote split: 2-5-2 (50bps cut, 25bps cut, unch) is the modal consensus - and we flag that the baseline projections may become less
useful as a communication tool going forward - and as such, less market relevant. EUR/GBP remains in a nascent uptrend, evident in the recovery from last Thursday's low. Key resistance and the bull trigger remains at 0.8769, the Jul 27 high. - Focus Thursday turns to the ECB's economic bulletin, US weekly jobless claims and unit labor costs and the latest Chinese trade balance numbers. Fed's Bostic is due to be addressing monetary policy shortly after the BoE rate decision.
THURSDAY DATA CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 07/08/2025 | 0600/0800 | ** |  DE | Trade Balance |
| 07/08/2025 | 0600/0800 | ** | DE | Industrial Production |
| 07/08/2025 | 0600/0800 | *** |  SE | Flash Inflation Report |
| 07/08/2025 | 0645/0845 | * |  FR | Foreign Trade |
| 07/08/2025 | 0700/0900 | ** |  CH | Unemployment |
| 07/08/2025 | 1100/1200 | *** |  GB | Bank Of England Interest Rate |
| 07/08/2025 | 1100/1200 | *** | GB | Bank Of England Interest Rate |
| 07/08/2025 | 1130/1230 | GB | BOE Press Conference | |
| 07/08/2025 | - | *** |  CN | Trade |
| 07/08/2025 | 1230/0830 | *** |  US | Jobless Claims |
| 07/08/2025 | 1230/0830 | ** | US | WASDE Weekly Import/Export |
| 07/08/2025 | 1230/0830 | ** | US | Preliminary Non-Farm Productivity |
| 07/08/2025 | 1300/1400 | GB | BOE Decision Maker Panel Data BOE Decision Maker Panel Data | |
| 07/08/2025 | 1400/1000 | * |  CA | Ivey PMI |
| 07/08/2025 | 1400/1000 | ** | US | Wholesale Trade |
| 07/08/2025 | 1400/1000 | ** | US | Wholesale Trade |
| 07/08/2025 | 1400/1000 | US | Atlanta Fed's Raphael Bostic | |
| 07/08/2025 | 1430/1030 | ** | US | Natural Gas Stocks |
| 07/08/2025 | 1500/1100 | ** | US | NY Fed Survey of Consumer Expectations |
| 07/08/2025 | 1530/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 07/08/2025 | 1530/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 07/08/2025 | 1700/1300 | *** | US | US Treasury Auction Result for 30 Year Bond |
| 07/08/2025 | 1900/1500 | * | US | Consumer Credit |
| 07/08/2025 | 1900/1500 | *** |  MX | Mexico Interest Rate |
| 08/08/2025 | 2330/0830 | ** |  JP | Household spending |
| 08/08/2025 | 2350/0850 | JP | Balance of Payments |
