MNI ASIA OPEN: ISM Manufacturing Improved/New Orders Soft

EXECUTIVE SUMMARY

• MNI FED: BofA Also Call For 25bp Cut Next Week, Terminal View Maintained
• MNI US: Indiana House Republicans Release New Draft Congressional Map
• MNI US DATA: Manufacturing PMI Revised Up In Final Nov Print But Still Dips On Month
• MNI US OUTLOOK/OPINION: Two-Sided Risks For ISM Mfg, New Orders Look Softer

US

MNI FED: BofA Also Call For 25bp Cut Next Week, Terminal View Maintained

BofA are the latest to formally switch to calling for the Fed to cut another 25bp next week, after JPMorgan did similar on Wednesday before Thanksgiving. They maintain their terminal rate forecast of 3-3.25%, with now two 25bp cuts next year (Jun & Jul) rather than three.

• “We still think the next Fed Chair won't be able to convince the FOMC to cut below 3%. And to be clear, our forecast of additional cuts next year is due to the change in leadership, not our read on the economy. In fact, by cutting rates next week, we think the Fed would increase the risk of pushing policy into accommodative territory, just as fiscal stimulus kicks in.”

NEWS

MNI US: Indiana House Republicans Release New Draft Congressional Map

Indiana State Republicans released a draft Congressional map that, if enacted, would likely eliminate the two Democratic Representatives from the state's delegation at the 2026 midterm elections. The draft comes amid a standoff between President Donald Trump and Republican state senators, who have so far blocked action on a new map. 

• State Senator Michael Bohacek (R) wrote on Facebook he would block a new map, citing a Truth Social post by Trump using a slur to describe Minnesota Governor Tim Walz (D-MN): “I will be voting NO on redistricting, perhaps [Trump] can use the next 10 months to convince voters that his policies and behavior deserve a congressional majority.”

MNI SECURITY: Trump To Hold Meeting To Discuss Next Step On Venezuela Today - CNN

CNN reports that President Donald Trump will hold a senior Cabinet-level meeting at the White House at 17:00 ET 22:00 GMT today to discuss the next steps on Venezuela. The meeting comes after Trump issued a Saturday statement on Truth Social that appeared to suggest military action on Venezuelan soil could be imminent. 

• Trump wrote, “To all Airlines, Pilots, Drug Dealers, and Human Traffickers, please consider THE AIRSPACE ABOVE AND SURROUNDING VENEZUELA TO BE CLOSED IN ITS ENTIRETY.” Trump later downplayed he message, telling reporters aboard AF1 on Sunday, “Don't read anything into it”.

MNI UKRAINE: Macron & Zelenskyy Address Media After Paris Talks

Reuters reporting comments from French President Emmanuel Macron following his meeting with Ukrainian counterpart Volodymyr Zelenskyy in Paris. Macron says that Russia "has shown no sign of ending its aggression", and that "only Ukraine can decide on its territories". The Daily Telegraph reported last week that the US "is poised to recognise Russia’s control over Crimea and other occupied Ukrainian territories to secure a deal to end the war.[...] The plan to recognise territory, which breaks US diplomatic convention, is likely to go ahead despite concerns among Ukraine’s European allies."

MNI UK FISCAL: OBR Chair Hughes Resigns After Budget Fiasco

Chair of the Office for Budget Responsibility, Richard Hughes, has resigned following the fiasco of the early publication of the OBR's budget report last week. In his letter to Chancellor of the Exchequer Rachel Reeves and chair of the House of Commons Treasury Select Committee Dame Meg Hillier, Hughes says, "it is in the
best interest of the OBR for me to resign as its Chair and take full responsibility to the shortcomings identified in the report." 

• Hughes was due to appear in front of the House of Commons Treasury Select Committee tomorrow morning at 10:00GMT. It remains to be seen whether the session goes ahead with Hughes present, with him absent and the OBR represented by David Miles and Tom Josephs, members of the Budget Responsibility Committee at the OBR, or if it is cancelled entirely. 

US TSYS

US TSYS: Curves Bear Steepen, Trump Yet to Annc Fed Chair Choice

• Treasuries reversed early gains, look to finish near session lows Monday, trading sideways since late morning amid decent rate lock hedging/speculative selling ahead $17.75B corporate bond issuance, largely tied to Merck's $8B 8pt debt issuance.
• Currently, TYH6 -17 at 112-26 vs. 112-25.5 low, the retreat resulted in a breach of both the 20-day EMA, but more importantly the 50-day EMA at 112-27. A clear breach of this average would undermine a recent bull theme and signal scope for a deeper retracement. A reversal higher is required to refocus attention on the key resistance and bull trigger at 113-29+, the Oct 17 high.
• Curves bear steepen after: Trump has decided who will replace Chairman Powell (but not who or when; Hassett happy to fill chair). As such - projected rate cut pricing rises vs. late Friday (*): Dec'25 at -24.7bp (-20.7bp), Jan'26 at -30.6bp (-28.4bp), Mar'26 at -37.8bp (-36.1bp), Apr'26 at -44.1bp (-43.4bp).
• Treasuries bounced midmorning after dip in ISM Mfg, New Orders and Employ data, Prices Paid higher than expected: ISM manufacturing index improved marginally to 49.0 in November having dipped 0.4pts to 48.7 in Oct.
• The S&P Global US manufacturing PMI was revised up to 52.2 in the final November report vs 51.9 in the flash, although it still dips from 52.5 in October. The press release (link) notes some mixed findings with a “solid rise in production” but also a “considerable slowdown” in demand growth.
• Dented risk sentiment only remains seen through the lens of the crypto markets Monday, as the bounce back for equity indices across the US session sees both the e-mini S&P and Nasdaq futures rise back into positive territory.

OVERNIGHT DATA

MNI US OUTLOOK/OPINION: Two-Sided Risks For ISM Mfg, New Orders Look Softer

ISM manufacturing index is seen improving marginally to 49.0 in November having dipped 0.4pts to 48.7 in Oct. It has kept to a narrow range of 48.0-49.1 since March having eased back from Jan and Feb seeing the first months above 50 (i.e. in expansionary territory) since late 2022, with a high of 50.9 in Jan. Alternate indicators are mixed, justifying the limited improvement expected.

• Regional Fed surveys: mild upside. The average of the five regional Fed surveys increased from -1.0 to -0.1 although it’s essentially flatlined around its breakeven 0 line for six months now. The ISM equivalent readings of the Empire and Philly Fed surveys fell to 51.8 from 53.1 (highest since Feb) after a 5.2pt drop in the Philly version but continue to point to upside risk from a levels basis.
• S&P Global PMI: downside momentum, upside level. The flash survey eased from 52.5 to 51.9 in November to take it a little further away from the 53.0 in August that had been a multi-year high. It has averaged 2.6pts higher than the ISM survey so far this year, but by firmly differing amounts (between 0.3-4.3pts).
• MNI Chicago PMI: firm downside. It slumped 7.5pts to 36.3 in November for its second lowest since mid-2020 whilst new orders saw their largest one-month fall since Sep 2023.

MNI US DATA: Manufacturing PMI Revised Up In Final Nov Print But Still Dips On Month

The S&P Global US manufacturing PMI was revised up to 52.2 in the final November report vs 51.9 in the flash, although it still dips from 52.5 in October. The press release (link) notes some mixed findings with a “solid rise in production” but also a “considerable slowdown” in demand growth. 

MNI CANADA DATA: November Manufacturing PMI Pulls Back From Highest Since January

The S&P Global Canada manufacturing PMI fell 1.2pts to 48.4 in November to unwind more than half a nearly 2pt increase to 49.6 in October. The index may be holding above the 45.3 low seen in April on reciprocal tariff announcements but the press release still sounds gloomy (link). 

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA down 327.07 points (-0.69%) at 47390.48
S&P E-Mini Future down 27 points (-0.39%) at 6832.75
Nasdaq down 79.2 points (-0.3%) at 23286.19
US 10-Yr yield is up 7.9 bps at 4.0923%
US Mar 10-Yr futures are down 16/32 at 112-27
EURUSD up 0.001 (0.09%) at 1.1608
USDJPY down 0.68 (-0.44%) at 155.49
WTI Crude Oil (front-month) up $0.89 (1.52%) at $59.44
Gold is down $1.74 (-0.04%) at $4237.96

European bourses closing levels:
EuroStoxx 50 down 0.69 points (-0.01%) at 5667.48
FTSE 100 down 17.98 points (-0.19%) at 9702.53
German DAX down 247.35 points (-1.04%) at 23589.44
French CAC 40 down 25.71 points (-0.32%) at 8097

US TREASURY FUTURES CLOSE

Curve update:
3M10Y +9.75, 30.228 (L: 18.594 / H: 30.873)
2Y10Y +3.591, 55.576 (L: 52.705 / H: 55.998)
2Y30Y +3.783, 120.522 (L: 117.692 / H: 121.769)
5Y30Y +0.62, 107.088 (L: 106.815 / H: 109.53)
Current futures levels:
Mar 2-Yr futures down 2.875/32 at 104-10.875 (L: 104-10.5 / H: 104-14.5)
Mar 5-Yr futures down 10.5/32 at 109-14 (L: 109-13.5 / H: 109-24.75)
Mar 10-Yr futures down 16/32 at 112-27 (L: 112-25.5 / H: 113-11)
Mar 30-Yr futures down 38/32 at 116-8 (L: 116-05 / H: 117-13)
Mar Ultra futures down 44/32 at 119-18 (L: 119-13 / H: 120-31)

MNI US 10YR FUTURE TECHS: (H6) Retracement Extends

• RES 4: 114-00   Round number resistance
• RES 3: 113-29+ High Oct 17 and a key resistance
• RES 2: 113-23   High Oct 23
• RES 1: 113-11/22+ Intraday high / High Nov 25
• PRICE:‌‌ 112-27 @ 17:12 GMT Dec 1
• SUP 1: 112-26   Low Dec 01
• SUP 2: 112-10+ Low Nov 20
• SUP 3: 112-07   Low Nov 5 and a key support
• SUP 4: 112-02+ Low Sep 25  

Treasuries have started the week on a bearish note. Monday’s move down has resulted in a breach of both the 20-day EMA, but more importantly the 50-day EMA at 112-27. A clear breach of this average would undermine a recent bull theme and signal scope for a deeper retracement. A reversal higher is required to refocus attention on the key resistance and bull trigger at 113-29+, the Oct 17 high. 

SOFR FUTURES CLOSE

Current White pack (Dec 25-Sep 26):
Dec 25 -0.005 at 96.263
Mar 26 -0.025 at 96.425
Jun 26 -0.035 at 96.660
Sep 26 -0.045 at 96.825
Red Pack (Dec 26-Sep 27) -0.065 to -0.045
Green Pack (Dec 27-Sep 28) -0.08 to -0.07
Blue Pack (Dec 28-Sep 29) -0.085 to -0.08
Gold Pack (Dec 29-Sep 30) -0.08 to -0.075

REFERENCE RATES
​​​​​​​
US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 4.12% (+0.07), volume: $3.361T
• Broad General Collateral Rate (BGCR): 4.08% (+0.06), volume: $1.269T
• Tri-Party General Collateral Rate (TCR): 4.08% (+0.06), volume: $1.236T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 3.89% (+0.01), volume: $90B
• Daily Overnight Bank Funding Rate: 3.88% (+0.00), volume: $167B

FED Reverse Repo Operation

RRP usage slips to $3.240B with 9 counterparties this afternoon from $7.561B Friday. Compares to last Tuesday November 18: $0.905B - lowest level since mid-March 2021; this years highest excess liquidity measure: $460.731B on June 30.

MNI PIPELINE: Corporate Bond Update: $8B Merck 8Pt Launched

Merck's $8B 8pt debt issuance lion's share of today's $17.75B total corporate issuance on the day:

• Date $MM Issuer (Priced *, Launch #)
• 12/01 $8B #Merck** $500M +3Y +57, $750M +3Y SOFR+35, $1B +5Y +50, $1B 7Y +60, $1.5B 10Y +70, $750M +20Y +80, $1.5B 30Y +85, $1B 40Y +100
• 12/01 $2B #ANZ $750M 3Y +37, $750M 3Y SOFR+59, $500M 5Y SOFR+68
• 12/01 $1.3B Post Holdings 10.25NC5.25
• 12/01 $1.25B #GE Healthcare $600M 3Y +60, $650M 10Y +95
• 12/01 $1.2B #Western Midstream $600M +5Y +113, $600M 10Y +148
• 12/01 $1.05B #National Rural Utilities $650M 2Y +45, $400M 5Y +65
• 12/01 $1B #S&P Global $600M +5Y +58, $400M 10Y +75
• 12/01 $1B Hilton Domestic 8.25NC3 5.5%a
• 12/01 $950M #Burlington Northern SF 30Y +85

MNI FOREX: Equity Bounce Prompts Solid Greenback Recovery

• USD: Dented risk sentiment only remains seen through the lens of the crypto markets Monday, as the bounce back for equity indices across the US session sees both the e-mini S&P and Nasdaq futures rise back into positive territory. Rather than providing a specific bid to risk-tied currencies in G10, the moves have bolstered a solid recovery for the US dollar. ISM manufacturing data came in a touch below expectations, not garnering any market reaction.
• JPY: Given the prior volatility for USDJPY, this has translated in a notable 80 pip bounce for the pair. Earlier, we noted how USDJPY had traded below its 20-day EMA and below the prior breakout point at 155.00. Despite this, the solid recovery may create some false breaks on the chart, keeping bullish conditions intact, for now.
  • Many had cited the yen’s outperformance as a reaction to BOJ Governor giving slightly more of a nod to a December rate hike. In our view, the slight adjustment between Jan and Dec pricing should have little impact on short-term yen sentiment, with domestic fiscal developments and China-Japan tensions more likely to drive he narrative.
• GBP: Elsewhere, GBPUSD has had a similar sized turnaround, falling sharply from 1.3275 post-budget highs to now edge closer to 1.32. The resignation of the head of the UK OBR, fiscal uncertainties and a likely December rate cut from the BOE remain headwinds for sterling, and could keep a move back towards 1.3010 for cable on the cards. In sympathy EURGBP, has traded in a constructive manner, edging back towards 0.88.
• Commodity currencies saw little interest to start the week, allowing NZDUSD to consolidate its recent rally back above 0.5700, still signaling scope for a stronger recovery to the medium-term pivot at 0.5800. For Aussie, Q3 GDP data are due on Wednesday.

TUESDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
02/12/2025	0700/0700		GB	BOE Financial Stability Report
02/12/2025	0745/0845		FR	Budget Balance
02/12/2025	0900/1000		IT	Unemployment
02/12/2025	1000/1100	**	EU	EZ Unemployment
02/12/2025	1000/1000	**	GB	Gilt Outright Auction Result
02/12/2025	1000/1000	*	GB	Index Linked Gilt Outright Auction Result
02/12/2025	1000/1100	***	EU	EZ HICP Flash
02/12/2025	1000/1100	***	EU	EZ HICP Flash
02/12/2025	1000/1100	***	EU	EZ HICP Flash
02/12/2025	-	***	US	Domestic-Made Vehicle Sales
02/12/2025	1355/0855	**	US	Redbook Retail Sales Index
02/12/2025	1500/1000		US	Fed Vice Chair Michelle Bowman
03/12/2025	2200/0900	*	AU	S&P Global Final Australia Services PMI
03/12/2025	2200/0900	**	AU	S&P Global Final Australia Composite PMI
03/12/2025	0030/0930	**	JP	S&P Global Final Japan Services PMI
03/12/2025	0030/0930	**	JP	S&P Global Final Japan Composite PMI
03/12/2025	0030/1130	***	AU	Quarterly GDP
03/12/2025	0145/0945	**	CN	S&P Global Final China Services PMI
03/12/2025	0145/0945	**	CN	S&P Global Final China Composite PMI