MNI ASIA OPEN: Mid-East Tensions Ease, RBA Ahead, US Data Hold

EXECUTIVE SUMMARY

• RBA: MNI RBA Preview-Feb 2026: +25bps Likely, Focus On Outlook
• US/IRAN (BBG): Iran Hopes Middle East Diplomacy Push Will Avert War With US
• MNI US DATA: Inventory Build Helps Surprise Upward Revision In January Mfg PMI
• MNI US TSYS/SUPPLY: Borrowing Ests Close To MNI Estimates, With End-FYQ3 Cash Twist
• MNI US DATA: ISM Manufacturing Follows MNI Chicago PMI With A Sharp Increase

US

MNI US TSYS/SUPPLY: Borrowing Ests Close To MNI Estimates, With End-FYQ3 Cash Twist

US Treasury publishes its latest quarterly financing estimates - see image below for sources/uses table vs the November refunding's estimates and MNI's expectations. For the Jan-Mar quarter, Treasury expects to borrow $574B (prior estimate was $578B; MNI's expectation was $575B) with a financing need of $530B (prior estimate was $511B; MNI's expectation was $573B, with the main difference being Treasury's estimate of non-borrowing financing which often rests on technical factors).

NEWS

US TSYS

MNI US TSYS: Delay of Data on Latest US Gov Shutdown

• Treasuries look to finish weaker, reversing early Monday gains after a surge in ISM data: far stronger than expected in January as it jumped 4.7pts to 52.6 for its highest since Aug 2022, significantly above even the highest analyst estimate of 51.0. New orders and production both surged to their highest since early 2022 - unlike the final PMI survey released shortly beforehand, it doesn’t look linked to an inventory build.
• The S&P Global US manufacturing PMI saw a sizeable upward revision in January from 51.9 in the flash to 52.4 in the final (cons 52.0) after 51.8 in Dec, for its highest since October. The press release notes strong production but also a contribution from inventory build. Highlights from the full release (link).
• Currently, TYH6 trades -8 at 111-18.5, continued weakness puts focus attention on the bear trigger at 111-09, the Jan 20 low. Conversely, the next important resistance to watch is 112-08+, the 50-day EMA. A clear break of the 50-day average is required to signal scope for a stronger recovery.
• For the Jan-Mar quarter, Treasury expects to borrow $574B (prior estimate was $578B; MNI's expectation was $575B) with a financing need of $530B.
• In terms of data it's already too late for Tuesday's JOLTS release to come out on time, and judging from the BLS's communications today, nonfarm payrolls will be postponed from Friday until an unknown future date (known only once the government is back open).
• The House Rules Committee is shortly due to begin consideration on a Senate-passed appropriations package for five government departments and a two-week funding extension for DHS. Successful passage of the measure will end a partial government shutdown that took effect at midnight on Friday.

OVERNIGHT DATA

MNI US DATA: ISM Manufacturing Follows MNI Chicago PMI With A Sharp Increase

The ISM manufacturing report was far stronger than expected in January as it jumped 4.7pts to 52.6 for its highest since Aug 2022, significantly above even the highest analyst estimate of 51.0. New orders and production both surged to their highest since early 2022 - unlike the final PMI survey released shortly beforehand, it doesn’t look linked to an inventory build. The report chimes with a particularly strong MNI Chicago PMI released last week with added support from most of the regional Fed manufacturing surveys also improving in January. 

MNI US DATA: Inventory Build Helps Surprise Upward Revision In January Mfg PMI

The S&P Global US manufacturing PMI saw a sizeable upward revision in January from 51.9 in the flash to 52.4 in the final (cons 52.0) after 51.8 in Dec, for its highest since October. The press release notes strong production but also a contribution from inventory build. Highlights from the full release (link): 

• “A solid and stronger improvement in US manufacturing sector operating conditions was signaled by January’s S&P Global PMI® data amid the joint-sharpest upturn in production since May 2022.
• “However, growth was in part driven by inventory building as new orders, despite returning to expansion in January, increased only modestly.”
• “Tariffs remained a notable theme from the latest survey, driving up input costs to a greater degree and limiting demand gains, especially from international markets.”
• Output prices tell a similar story to that first reported in the flash: “Input cost inflation increased from December, while manufacturers’ own charges rose to the greatest extent since last August.”

MNI CANADA DATA: Best Manufacturing PMI In A Year Doesn't Dispel Stalling Narrative

Canadian manufacturing PMI jumped to 50.4 in January from 48.6 prior, in the strongest S&P Global report for the sector in a year. The signs under the surface weren't universally encouraging but at least the soft economic momentum evident in Q4 2025 doesn't look to have deteriorated at the start of 2026.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA up 515.19 points (1.05%) at 49407.66
S&P E-Mini Future up 36.25 points (0.52%) at 7002
Nasdaq up 130.3 points (0.6%) at 23592.11
US 10-Yr yield is up 4.4 bps at 4.2794%
US Mar 10-Yr futures are down 8/32 at 111-18.5
EURUSD down 0.0059 (-0.5%) at 1.1792
USDJPY up 0.81 (0.52%) at 155.58
WTI Crude Oil (front-month) down $2.93 (-4.49%) at $62.28
Gold is down $235.71 (-4.82%) at $4658.17

European bourses closing levels:
EuroStoxx 50 up 59.7 points (1%) at 6007.51
FTSE 100 up 118.02 points (1.15%) at 10341.56
German DAX up 258.71 points (1.05%) at 24797.52
French CAC 40 up 54.64 points (0.67%) at 8181.17

US TREASURY FUTURES CLOSE

Curve update:
3M10Y +4.171, 61.062 (L: 53.576 / H: 61.262)
2Y10Y -0.527, 70.37 (L: 69.331 / H: 72.689)
2Y30Y -0.992, 133.606 (L: 131.94 / H: 136.556)
5Y30Y -0.934, 107.335 (L: 105.72 / H: 110.04)
Current futures levels:
Mar 2-Yr futures down 2.875/32 at 104-5 (L: 104-04.75 / H: 104-09.375)
Mar 5-Yr futures down 6.25/32 at 108-23.5 (L: 108-22.75 / H: 109-03.25)
Mar 10-Yr futures down 8/32 at 111-18.5 (L: 111-16.5 / H: 112-02)
Mar 30-Yr futures down 19/32 at 114-17 (L: 114-14 / H: 115-15)
Mar Ultra futures down 24/32 at 116-22 (L: 116-20 / H: 117-30)

MNI US 10YR FUTURE TECHS: (H6) Corrective Bounce Extends

• RES 4: 112-31   High Dec 18 and key short-term resistance
• RES 3: 112-22   High Jan 7
• RES 2: 112-08+ 50-day EMA
• RES 1: 112-02   Intraday high
• PRICE:‌‌ 111-18+ @ 1554 ET Feb 2
• SUP 1: 111-15+/09 Low Jan 28 / 20 and the bear trigger
• SUP 2: 111-00   Round number support
• SUP 3: 110-30+ 1.618 proj of the Oct 17 - Nov 5 - 25 price swing 
• SUP 4: 110-22+ 1.764 proj of the Oct 17 - Nov 5 - 25 price swing

Treasuries are firmer today. However, the trend condition remains bearish and short-term gains still appear corrective. The contract has traded through the 20-day EMA, at 111-31. The next important resistance to watch is 112-08+, the 50-day EMA. A clear break of the 50-day average is required to signal scope for a stronger recovery. For bears, a resumption of weakness would refocus attention on the bear trigger at 111-09, the Jan 20 low.

SOFR FUTURES CLOSE

Current White pack (Mar 26-Dec 26):
Mar 26 -0.015 at 96.370
Jun 26 -0.045 at 96.530
Sep 26 -0.050 at 96.705
Dec 26 -0.055 at 96.770
Red Pack (Mar 27-Dec 27) -0.06 to -0.055
Green Pack (Mar 28-Dec 28) -0.055 to -0.04
Blue Pack (Mar 29-Dec 29) -0.04 to -0.035
Gold Pack (Mar 30-Dec 30) -0.035 to -0.02

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

• Secured Overnight Financing Rate (SOFR): 3.68% (+0.03), volume: $3.275T
• Broad General Collateral Rate (BGCR): 3.66% (+0.03), volume: $1.314T
• Tri-Party General Collateral Rate (TCR): 3.66% (+0.03), volume: $1.277T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 3.64% (+0.00), volume: $101B
• Daily Overnight Bank Funding Rate: 3.63% (+0.00), volume: $194B

FED Reverse Repo Operation

RRP usage inches up to $10.415B with 8 counterparties this afternoon vs. $9.629B Friday. 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 PIPELINE: Corporate Bond Update: $25B Oracle 8Pt Jumbo Debt Launched

Oracle's latest 8Pt jumbo issuance of $25B puts it in the top-10 largest issuers on record:

• Date $MM Issuer (Priced *, Launch #)
• 02/02 $25B #Oracle $3B 3Y +95, $500M 3Y SOFR+111, $3.5B 5Y +115, $3B +7Y +130, $5B 10Y +145, $2.25B 20Y +170, $5B 30Y +180, $2.75B 40Y +195
• 02/02 $2.6B #GE Vernova $600M 5Y +45, $1B 10Y +65, $1B 30Y +78

MNI BONDS: EGBs-GILTS CASH CLOSE: Gilts Outperform Bunds At Start Of Busy Week

Gilts outperformed Bunds at the start of a busy week for European risk events.

• EGBs and Gilts caught a bid early in a risk-off move after precious metals' price collapse Friday and equity weakness in Asia-Pac trade coming out of the weekend.
• Global bonds pulled back with US Treasuries after the day's key data point, ISM Manufacturing, had one of its largest upside surprises in decades.
• On the day, the German curve leaned bear flatter with the UK's slightly bull steeper.
• Periphery/semi-core EGB spreads were little changed, including BTPs after widening early despite Italy's ratings outlook getting revised to Positive from Stable by S&P on Friday.
• OATs, too, were largely unchanged; after the cash close France's parliament adopted a 2026 budget after no-confidence votes against the government failed (this had been expected).
• Focus remains on the January flash inflation data to come this week (including Eurozone on Wednesday) and of course the BOE and ECB decisions on Thursday.

Closing Yields / 10-Yr EGB Spreads To Germany:

• Germany: The 2-Yr yield is up 2.5bps at 2.114%, 5-Yr is up 3.1bps at 2.448%, 10-Yr is up 2.5bps at 2.868%, and 30-Yr is up 2.2bps at 3.516%.
• UK: The 2-Yr yield is down 1.5bps at 3.703%, 5-Yr is down 1.4bps at 3.936%, 10-Yr is down 1.6bps at 4.506%, and 30-Yr is down 1.2bps at 5.273%.
• Italian BTP spread up 0.1bps at 61.4bps / Spanish down 0.4bps at 36.5bps

MNI FOREX: Firmer US Data Assists Extension of USD Rebound

• Despite some sharp moves lower for both precious metals and equities in early trade Monday, a subsequent recovery for risk has helped boost the US dollar, where sentiment has also been supported by a stellar set of US ISM manufacturing PMI data.
• The ISM manufacturing report was far stronger than expected in January as it jumped 4.7pts to 52.6 for its highest since Aug 2022, significantly above even the highest analyst estimate of 51.0. This has assisted the dollar index to extend intraday gains to around 0.5%, extending its recovery from last week’s cycle lows to over 2%.
• This has in turn weighed on EURUSD, which has today slipped back below 1.18, an impressive reversal from last week’s 1.2081 peak. Moves have met the primary objective for a pullback, that being 1.1793, the 20- day EMA. However, more meaningful support is at the 50-day EMA, which lies at 1.1729, important as we approach this week’s ECB decision and press conference.
• It’s the Swiss franc which has notably underperformed on Monday, with USDCHF (+0.95%) retaking the 0.78 handle and EURCHF rising back above 0.92. Given the de-risking that has been on display elsewhere since Friday, short-term positioning dynamics may be assisting the squeeze higher for cross/CHF, while some analysts have pointed to the depressed EURCHF levels as potentially ringing the alarm bells for the SNB.
• In emerging markets, US President Donald Trump said in a statement on Truth Social that he has agreed to lower the reciprocal tariff rate on India from 25% to 18% after agreeing a trade deal with Indian Prime Minister Narendra Modi. The announcement prompted USDINR 1-month NDFs to slip further on the session, currently down around 1.2%.
• News has crossed indicating both tomorrow’s US JOLTS data and Friday’s payrolls report will be rescheduled owing to the US Government shutdown. The calendar will be highlighted by the RBA decision, where a 25bp hike is expected by a majority of surveyed analysts.

TUESDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
03/02/2026	0700/0200	*	TR	Turkey CPI
03/02/2026	0745/0845	***	FR	HICP (p)
03/02/2026	0745/0845		FR	Budget Balance
03/02/2026	0900/1000	**	EU	ECB Bank Lending Survey
03/02/2026	1000/1000	**	GB	Gilt Outright Auction Result
03/02/2026	1300/0800		US	Richmond Fed's Tom Barkin
03/02/2026	1355/0855	**	US	Redbook Retail Sales Index
03/02/2026	1500/1000	***	US	JOLTS jobs opening level
03/02/2026	1500/1000	***	US	JOLTS quits Rate
04/02/2026	2200/0900	*	AU	S&P Global Final Australia Services PMI
04/02/2026	2200/0900	**	AU	S&P Global Final Australia Composite PMI
04/02/2026	0030/0930	**	JP	S&P Global Final Japan Services PMI
04/02/2026	0030/0930	**	JP	S&P Global Final Japan Composite PMI
04/02/2026	0145/0945	**	CN	S&P Global Final China Services PMI
04/02/2026	0145/0945	**	CN	S&P Global Final China Composite PMI