MNI ASIA OPEN: Kevin Hassett for Fed Chair Leads Betting Mkts

EXECUTIVE SUMMARY

• MNI FED: Gov Miran: Data Should Push Policy Outlook In A Dovish Direction
• MNI ECB: Schnabel Reiterates That She Doesn’t Expect Rate Hikes For Some Time
• MNI FED: Trump Fed Chair Pick Could Come By First Week Of Jan - Reuters

US

MNI FED: Gov Miran: Data Should Push Policy Outlook In A Dovish Direction

Gov Miran on Bloomberg TV says that the incoming data have "come out in accordance with my view of the world", referring in particular to last week's CPI and Employment Situation reports. His view of course includes further rate cuts in 2026. Inflation "has steadily come in cooler than expectations", with the unemployment rate having "poked up potentially above where people thought it was going to go", so overall "we have had data that should push people into a dovish direction."

• He acknowledges that the softer-than-expected CPI print included "a couple of anomalies" that suppressed the figures to the downside but "the consequences are not huge", with an impact of "in the neighborhood of 2/10 of a point" for PCE split between shelter data quirks and 2nd half-November collection date effects.

MNI FED: Trump Fed Chair Pick Could Come By First Week Of Jan - Reuters

"PRESIDENT TRUMP COULD NAME NEW FED CHAIR BY FIRST WEEK OF JANUARY- CNBC CITING PEOPLE FAMILIAR" - Reuters

• These headlines offer slightly more precise timing as to when President Trump might announce his Fed chair pick.
• It chimes with him saying last week that an announcement could come in the coming weeks and having previously touted early in the new year.
• Blackrock's Rieder is set to be interviewed in the last week of the year per CNBC reporting last week.
• NEC's Hassett has seen some renewed support in betting markets today, with a probability rising to 60% on Polymarket (highest in ten days) whilst Warsh/Waller are at 18%/12% as expectations of Trump choosing a former/current Fed Governor has faded. Rieder rounds the top four out at 6%. 

NEWS

MNI ECB: Schnabel Reiterates That She Doesn’t Expect Rate Hikes For Some Time ECB’s Schnabel has said in a FAZ podcast that she didn’t say rates should be raised and that she doesn’t expect rate hikes for the foreseeable future with rates probably stable for quite some time. 

POLITICO EU: "Vice President JD Vance gave a stark outlook on the reality of the Russia-Ukraine war, saying he doesn’t have “confidence” there will be a peaceful solution to the gruesome conflict reaching its fourth year."

IFX: RUSSIAN, VENEZUELAN FOREIGN MINISTERS EXPRESS SERIOUS CONCERN ABOUT WASHINGTON INTENSIFYING ESCALATORY ACTIONS IN CARIBBEAN SEA

US TSYS

MNI US TSYS: Tsy Yld Gains Ahead Tue Data: Wkly ADP, GDP, IP/Cap-U, Tsy Note Sales

• Treasuries look to finish near late Monday lows, light volumes (TYH6 705k) on narrow ranges at the start of the shortened Christmas holiday week: early close Wednesday at 1315ET, Thursday Closed, full session Friday.
• Currently, TYH6 trades -4.5 at 112-11.5 (10Y yld 4.1667 +.0196) vs. 112-09.5 low, a continuation lower would refocus attention on 111-29, the Dec 10 low and a key short-term support. A breach of this support resumes the bear cycle that started Oct 17.
• Scant data today: Chicago Fed National Activity Index for September at -0.21 vs -0.31 in August, while Gov Miran on Bloomberg TV says that the incoming data have "come out in accordance with my view of the world", referring in particular to last week's CPI and Employment Situation reports.
• Focus is on tomorrow's busy morning data schedule: ADP Weekly, GDP, IP/Cap-U, while US Tsy auctions 2Y FRN and 5Y Notes.
• The Japanese finance minister Katayama provided the most forceful warning of intervention on Monday, stating that the MoF have a ‘free hand’ to take bold action on the currency. This kept pressure on USDJPY, which erased around 100 pips of the strong rally seen following the BOJ’s hike last Friday. 

OVERNIGHT DATA

Chicago Fed National Activity Index for September at -0.21 vs -0.31 in August.

MARKETS SNAPSHOT

DJIA up 243.35 points (0.51%) at 48376.54
S&P E-Mini Future up 44.75 points (0.65%) at 6932
Nasdaq up 119.5 points (0.5%) at 23427.3
US 10-Yr yield is up 1.6 bps at 4.1628%
US Mar 10-Yr futures are down 4.5/32 at 112-11.5
EURUSD up 0.0048 (0.41%) at 1.1758
USDJPY down 0.82 (-0.52%) at 156.94
WTI Crude Oil (front-month) up $1.5 (2.65%) at $58.03
Gold is up $96.39 (2.22%) at $4434.56

European bourses closing levels:
EuroStoxx 50 down 16.66 points (-0.29%) at 5743.69
FTSE 100 down 31.45 points (-0.32%) at 9865.97
German DAX down 4.43 points (-0.02%) at 24283.97
French CAC 40 down 30.31 points (-0.37%) at 8121.07

US TREASURY FUTURES CLOSE

Curve update:
3M10Y +0.572, 54.041 (L: 51.539 / H: 57.97)
2Y10Y -0.339, 65.821 (L: 65.233 / H: 67.701)
2Y30Y -0.279, 133.592 (L: 132.472 / H: 135.691)
5Y30Y -0.136, 112.779 (L: 111.789 / H: 114.224)
Current futures levels:
Mar 2-Yr futures down 1.375/32 at 104-11.25 (L: 104-10.75 / H: 104-12.5)
Mar 5-Yr futures down 3/32 at 109-8 (L: 109-06.5 / H: 109-11)
Mar 10-Yr futures down 4.5/32 at 112-11.5 (L: 112-09.5 / H: 112-15.5)
Mar 30-Yr futures down 4/32 at 115-6 (L: 114-31 / H: 115-11)
Mar Ultra futures down 8/32 at 117-25 (L: 117-19 / H: 118-03)

MNI US 10YR FUTURE TECHS: (H6) Trading Below Resistance

• RES 4: 113-22+ High Nov 25 and a key resistance
• RES 3: 113-09   76.4% retracement of the Nov 25 - Dec 10 bear leg
• RES 2: 113-07   High Dec 3
• RES 1: 112-31/113-00+ High Dec 18 / 61.8% of Nov 25 - Dec 10 leg
• PRICE:‌‌ 112-12+ @ 11:26 GMT Dec 22
• SUP 1: 112-06/111-29   Low Dec 16 / 10 and the bear trigger
• SUP 2: 111-19   1.236 proj of the Oct 17 - Nov 5 - 25 price swing
• SUP 3: 111-11   1.382 proj of the Oct 17 - Nov 5 - 25 price swing
• SUP 4: 111-00   Round number support 

Treasuries have pulled back from their recent highs. A key short-term resistance has been defined at 112-31, the Dec 18 high. Clearance of this level would signal scope for a stronger corrective phase and open 113-00 initially, a Fibonacci retracement point. For bears, a continuation lower would refocus attention on 111-29, the Dec 10 low and a key short-term support. A breach of this support resumes the bear cycle that started Oct 17.

SOFR FUTURES CLOSE

Current White pack (Mar 26-Dec 26):
Mar 26 -0.005 at 96.490
Jun 26 -0.010 at 96.695
Sep 26 -0.020 at 96.840
Dec 26 -0.025 at 96.885
Red Pack (Mar 27-Dec 27) -0.04 to -0.035
Green Pack (Mar 28-Dec 28) -0.03 to -0.015
Blue Pack (Mar 29-Dec 29) -0.01 to -0.01
Gold Pack (Mar 30-Dec 30) -0.005 to +0.005

REFERENCE RATES
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US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 3.66% (+0.00), volume: $3.238T
• Broad General Collateral Rate (BGCR): 3.63% (+0.00), volume: $1.325T
• Tri-Party General Collateral Rate (TCR): 3.63% (+0.00), volume: $1.295T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 3.64% (+0.00), volume: $93B
• Daily Overnight Bank Funding Rate: 3.64% (+0.00), volume: $181B

FED Reverse Repo Operation

RRP usage slips to $1.523B with 7 counterparties this afternoon vs. Friday's $3.047B. Compares to December 12 low of $0.838B (lowest level since mid-March 2021); this years highest excess liquidity measure: $460.731B on June 30.

MNI BONDS: EGBs-GILTS CASH CLOSE: Bunds Enjoy Late Schnabel-Related Rally

Cash EGBs picked up a late bid Monday, mitigating an earlier rise in yields.

• Core FI started off the session on the back foot in a continuation of last week's BOE/ECB-influenced price action. 10Y German yields briefly moved above 2.90% for the first time since March and were above that level just 15 minutes before the close.
• ECB's Schnabel told a FAZ podcast released Monday that "at the moment, no interest rate increase is to be expected in the foreseeable future... I didn’t say that interest rates should be raised...but rather that they shouldn’t be lowered again. That’s a very important distinction" (as quoted by Bloomberg).
• Those comments were interpreted as tempering hawkish perceptions of her remarks from earlier in the month when she said she was "rather comfortable" with the market's modestly-implied 2026 hikes. They made headlines just before the cash close, depressing EGB yields across the curve.
• Gilts twist steepened on the day, with a slight uptick in long-end yields carrying on from Friday's trade but remaining within the month's ranges. Final Q3 UK GDP data met expectations.
• Periphery / semi-core EGB spreads mostly closed wider of Bunds, though OAT spreads held in, with a French official expressing confidence that a 2026 budget will be agreed after negotiations resume in January.
• This week's schedule is thin due to upcoming holidays, with only 2nd tier data this side of Christmas.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.6bps at 2.148%, 5-Yr is down 0.3bps at 2.485%, 10-Yr is up 0.2bps at 2.897%, and 30-Yr is down 0.4bps at 3.532%.
• UK: The 2-Yr yield is down 0.8bps at 3.745%, 5-Yr is up 0.5bps at 3.976%, 10-Yr is up 1.2bps at 4.536%, and 30-Yr is up 1.6bps at 5.271%.
• Italian BTP spread up 1.2bps at 70.2bps / French OAT down 0.1bps at 71.5bps  

MNI FOREX: Softer USD Backdrop Prevailing, Katayama Sounds JPY Intervention Alarm

• The US dollar is notably weaker on Monday, with the USD index sliding roughly 0.35% as we approach the APAC crossover. This dynamic kept the focus on gold throughout the session, trading firmly to fresh all-time highs above $4,400/oz. Geopolitics remain in focus for FX markets with the US oil blockade of Venezuela continuing and US-European-Ukraine-Russia talks ended without a breakthrough with special envoy Witkoff saying that they were “productive and constructive".
• Firmer equity and oil/metal prices have boosted the likes of AUD and NZD to the top of the leaderboard, while GBP and JPY have also risen notably. NZDUSD has shrugged off the weakness from late last week and has returned to its medium-term pivot level of 0.5800, ahead of resistance which stands at 0.5831, the Dec 11 high.
• AUDUSD meanwhile remains in a bullish trend structure ahead of tomorrow's RBA minutes. The minutes will be scrutinised for more information around the board's degree of concern about upside inflation risks as well as how much this translates to the RBA's stance being skewed to the upside. AUDUSD is pressing towards resistance at 0.6686 December 10 high.
• An extension of GBPUSD strength was most notable during US hours, breaking above last week's 1.3456 highs, bolstering the ongoing bull theme and signalling scope for a move to 1.3527, the Oct 1 high.
• The Japanese finance minister Katayama provided the most forceful warning of intervention on Monday, stating that the MoF have a ‘free hand’ to take bold action on the currency. This kept pressure on USDJPY, which erased around 100 pips of the strong rally seen following the BOJ’s hike last Friday. Sights remain on key resistance at 157.89, the Nov 20 high and a bull trigger.
• In emerging markets, BRLMXN weakness continues to standout amid mounting political uncertainty in Brazil and ongoing Mexican peso resilience. The cross dropped another 1.2% today, closing in on 23 year lows just above 3.20.

TUESDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
23/12/2025	0700/0800	**	SE	PPI
23/12/2025	0700/0800	**	DE	Import/Export Prices
23/12/2025	0800/0900	**	ES	PPI
23/12/2025	0800/0900	***	ES	GDP (f)
23/12/2025	1200/0700	**	BR	Brazil Preliminary CPI
23/12/2025	1330/0830	***	CA	Gross Domestic Product by Industry
23/12/2025	1330/0830	**	US	Philadelphia Fed Nonmanufacturing Index
23/12/2025	1330/0830	***	US	GDP / PCE Quarterly
23/12/2025	1330/0830	***	US	GDP / PCE Quarterly
23/12/2025	1330/0830	**	US	Durable Goods New Orders
23/12/2025	1330/0830	**	US	Durable Goods New Orders
23/12/2025	1355/0855	**	US	Redbook Retail Sales Index
23/12/2025	1415/0915	***	US	Industrial Production
23/12/2025	1500/1000	**	US	Richmond Fed Survey
23/12/2025	1630/1130	**	US	US Treasury Auction Result for 52 Week Bill
23/12/2025	1800/1300	**	US	Baker Hughes Rig Count Overview - Weekly
23/12/2025	1800/1300	**	US	US Treasury Auction Result for 2 Year Floating Rate Note
23/12/2025	1800/1300	*	US	US Treasury Auction Result for 5 Year Note
23/12/2025	1830/1330		CA	Bank of Canada meeting minutes