MNI ASIA OPEN: MN Fed Kashkari 2 More Cuts

EXECUTIVE SUAMMRY

• MNI US-CHINA: Beijing Describes Trump-Xi Call As 'Constructive'
• MNI FED: Gov Miran: Rates Quite Far From Neutral
• MNI FED: SF's Daly: We Cut Rates To Try To Support Labor Market
• MNI FED: Minneapolis's Kashkari: 2 More Cuts In 2025, But Longer-Run Dot Rising

US

MNI FED: Minneapolis's Kashkari: 2 More Cuts In 2025, But Longer-Run Dot Rising

Minneapolis Fed President Kashkari (leans dovish, 2026 FOMC voter) wrote in an essay out Friday ("Three Questions" - link) that he not only supported the FOMC's 25bp cut at the September meeting, but he also penciled in a further two more through year-end, in line with the new Dot Plot median. That implies he would support cuts in October and December, representing one more cut than he had envisaged in his June Dot Plot submission for end-2025.

• In short, "I believe the risk of a sharp increase in unemployment warrants the committee taking some action to support the labor market", basically echoing September's Statement and Chair Powell's message at the press conference.

MNI FED: SF's Daly: We Cut Rates To Try To Support Labor Market

SF Fed President Daly didn't reveal much about her current rate view in a &A at an AI conference. She's probably one of the members on the "median" of 3 cuts in the updated September Dot Plot, but doesn't vote in 2025 or 2026. Daly: "You've seen over the last year, the labor market slow quite substantially. It's softened quite a bit. Part of that is just the outlook for the economy is slower, so businesses are being more cautious. Part of it is that companies don't have to hire as quickly, because they can do things with technology..."

MNI FED: Gov Miran: Rates Quite Far From Neutral

New Fed Governor Miran confirms in a CNBC appearance that he was the bottom dot on the new Dot Plot that saw rates ending the year at 2.75-3.00% (implying a total of 150bp of cuts going into the September meeting). He also suggests that he's not going not write the traditional essay explaining his dissent in favor of a 50bp cut (which which all told implied he supported 50bp cuts in September, October, and December), instead explaining in a speech on Monday (he's scheduled to speak at the Economic Club of New York):

• "This coming Monday, I'm going to be making a speech where I'm going to give a full accounting for my economic views and walk through in meticulous detail the economics and the arithmetic behind getting to those numbers. And it's too big for, you know, people usually write these dissents, and the dissents are, like, a page long, right? I'm going to walk through a lot of economics and a lot of arithmetic and a lot of math, and that's going to take a full speech to do. So we're going to get a full accounting of that on Monday. "
• Asked about whether he thinks conditions warrant a neutral interest rate now (as implied by his Dot Plot submission), Miran says: "I don't see a reason for being so far from neutral at the moment and the fact that we are quite far from neutral given that means the longer you stay very restrictive, the greater the risks build up of significant misses to the employment mandate."

MNI BRIEF: Fed Cuts Not On Preset Course, Kashkari Says

The risk of a worsening labor market is higher than that of a surge in inflation, but a higher neutral rate of interest means the Federal Reserve can take its time in reducing interest rates, Minneapolis Fed President Neel Kashkari said Friday. "I do not believe we should be on a preset course for a series of rate cuts. If the labor market proves more resilient than it seems at the moment or if inflation surprises to the upside, we should be prepared to pause and hold our policy rate," said Kashkari in an essay.

NEWS

MNI BRIEF: Supreme Court Asks Fed's Cook to Respond to DOJ

Chief Justice John Roberts Friday refrained from acting on the request to act on the President Donald Trump's request to remove Federal Reserve Governor Lisa Cook from her job, instead asking Cook for a response to the DOJ's filing by Sept. 25 at 4pm ET. The Justice Department brought the case to the high court yesterday after losing in lower courts. Her lawyers won lower court orders in recent weeks that allowed her to stay in her position while she fights Trump’s effort to fire her. The Federal Reserve held its latest meeting this week, with Cook participating and supporting a 25 basis point cut. 

MNI US: House Of Representatives Passes Short-Term Govt Funding Bill

The House of Representatives has passed a short-term funding measure to avert a government shutdown on October 1. The final vote tally was 217-212, with Republican reps Thomas Massie (R-KY) and Victoria Spartz (R-IN) voting with Democrats against the measure. Rep Jared Golden (D-ME) was the only Democrat to support the bill, as he was in a previous CR vote in March. 

MNI US-CHINA: Beijing Describes Trump-Xi Call As 'Constructive'

MNI London: China’s Xinhua news agency reports that this morning’s call between Chinese President Xi Jinping and US President Donald Trump was “pragmatic, positive, and constructive.” The translated readout notes, “The Chinese people will never forget the invaluable support provided by the United States and other anti-fascist allies to China's war of resistance.” According to the readout, “Xi Jinping emphasized the vital importance of China-US relations. China and the US can achieve mutual success and common prosperity, benefiting both countries and the world. To realize this vision, both sides must work together to achieve mutual respect, peaceful coexistence, and win-win cooperation.”

MNI SECURITY: Estonia Claims Russian Jets Violated Airspace In Latest Escalation

The Estonian Foreign Ministry has claimed that three Russian MiG-31 fighter jets violated the country's airspace for a total of 12 minutes while traversing the Gulf of Finland earlier today. Foreign minister Margus Tsahkna claimed that the violation was the fourth in 2025 to date, "which is unacceptable in itself, but today's violation, during which three fighter jets entered our airspace, is unprecedentedly brazen...Russia's ever-increasing testing of borders and aggressiveness must be responded to by rapidly strengthening political and economic pressure."

US TSYS

MNI US TSYS: Tsys Finishing Near Lows, Fed Speakers Out of Blackout

• Treasuries look to finish near session lows Friday, no obvious headline, data, Block or knock-on support in EGBs for random moves off lows.
• Currently, the Dec'25 10Y trades -6 at 112-25.5 (yld 4.1293% +.0249) vs. 112-22 low - initial technical support at 112-23.5/112-15.5 (Low Sep 19 / High Aug 5 and 14); resistance well above at 113-29 (High Sep 11 and the bull trigger). Curves mildly steeper: 2s10s +1.056 at 54.941, 5s30s +.037 at 105.990.
• Fed speakers returned from media blackout after Wednesday's 25bp rate cut:
  • New Fed Governor Miran confirms in a CNBC appearance that he was the bottom dot on the new Dot Plot that saw rates ending the year at 2.75-3.00% (implying a total of 150bp of cuts going into the September meeting).
  • SF Fed President Daly didn't reveal much about her current rate view in a Q&A at an AI conference. She's probably one of the members on the "median" of 3 cuts in the updated September Dot Plot, but doesn't vote in 2025 or 2026.
  • Mn Fed Kashkari does "not believe we should be on a preset course for a series of rate cuts."
• The dollar index trades in positive territory Friday, exhibiting session gains of around 0.3% as we approach the close. Broadly, the greenback maintains a very supportive tone following the solid post-Fed recovery, with the DXY now residing ~1.5% above the fresh cycle lows that were printed on Wednesday.

OVERNIGHT DATA

No economic data released Friday, which made ample room for the return of Fed speakers from media blackout following Wednesday's 25bp rate cut.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA up 214.65 points (0.47%) at 46355.51
S&P E-Mini Future up 31.75 points (0.47%) at 6725
Nasdaq up 134.1 points (0.6%) at 22604.78
US 10-Yr yield is up 2.5 bps at 4.1293%
US Dec 10-Yr futures are down 6.5/32 at 112-25
EURUSD down 0.0041 (-0.35%) at 1.1746
USDJPY down 0.02 (-0.01%) at 147.98
WTI Crude Oil (front-month) down $0.83 (-1.31%) at $62.73
Gold is up $39.61 (1.09%) at $3683.87

European bourses closing levels:
EuroStoxx 50 up 1.75 points (0.03%) at 5458.42
FTSE 100 down 11.44 points (-0.12%) at 9216.67
German DAX down 35.12 points (-0.15%) at 23639.41
French CAC 40 down 1.02 points (-0.01%) at 7853.59

US TREASURY FUTURES CLOSE

3M10Y +2.363, 14.786 (L: 12.099 / H: 16.395)
2Y10Y +1.266, 55.151 (L: 53.641 / H: 56.536)
2Y30Y +0.93, 116.797 (L: 115.532 / H: 118.398)
5Y30Y +0.233, 106.186 (L: 104.919 / H: 107.238)
Current futures levels:
Dec 2-Yr futures down 0.875/32 at 104-9.75 (L: 104-08.875 / H: 104-10.875)
Dec 5-Yr futures down 2.75/32 at 109-14.25 (L: 109-11.5 / H: 109-17.25)
Dec 10-Yr futures down 6/32 at 112-25.5 (L: 112-22 / H: 112-31.5)
Dec 30-Yr futures down 13/32 at 116-14 (L: 116-07 / H: 116-25) Dec Ultra futures down
15/32 at 119-27 (L: 119-17 / H: 120-08) 

MNI US 10YR FUTURE TECHS: (Z5) Corrective Pullback Still In Play

• RES 4: 114-16+ 1.0% 10-dma envelope
• RES 3: 114-10   High Apr 7 (cont.)
• RES 2: 114-00   Round number resistance
• RES 1: 113-29   High Sep 11 and the bull trigger
• PRICE:‌‌ 112-27+ @ 11:28 BST Sep 19
• SUP 1: 112-23+/112-15+ Low Sep 19 / High Aug 5  and 14
• SUP 2: 112-08   50-day EMA
• SUP 3: 111-13+ Low Aug 18 and a key support
• SUP 4: 110-25   Low Aug 1 

The pullback in Treasury futures from their recent highs appear corrective. Price has moved through the 20-day EMA, at 112-28+. The break signals scope for a deeper retracement and attention turns to the 50-day EMA, at 112-08 and the next key support. Moving average studies remain in a bull mode position, highlighting a dominant uptrend. The bull trigger has been defined at 113-29, the Sep 11 high.

SOFR FUTURES CLOSE

Current White pack (Dec 25-Sep 26):
Dec 25 -0.005 at 96.345
Mar 26 -0.015 at 96.570
Jun 26 -0.020 at 96.795
Sep 26 -0.020 at 96.930
Red Pack (Dec 26-Sep 27) -0.015 to -0.01
Green Pack (Dec 27-Sep 28) -0.02 to -0.01
Blue Pack (Dec 28-Sep 29) -0.025 to -0.02
Gold Pack (Dec 29-Sep 30) -0.035 to -0.03

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

• Secured Overnight Financing Rate (SOFR): 4.14% (-0.24), volume: $2.894T
• Broad General Collateral Rate (BGCR): 4.11% (-0.24), volume: $1.154T
• Tri-Party General Collateral Rate (TCR): 4.11% (-0.24), volume: $1.125T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.08% (-0.25), volume: $92B
• Daily Overnight Bank Funding Rate: 4.08% (-0.25), volume: $185B

FED Reverse Repo Operation

RRP usage slips to new low of $11.363B with 13 counterparties this afternoon from $13.707B Thursday, usage at lowest levels since early April 2021. Compared to this year's high usage of $460.731B occurred on June 30.

PIPELINE: Corporate Bond Roundup

No new corporate issuance Friday after $14.7B priced Thursday, $51.45B total on the week.

• Date $MM Issuer (Priced *, Launch #)
• 09/18 $5B *AT&T $1.15B 7Y +70, $1.25B 10Y +82, $1.1B 20Y +87.5, $1.5B 29Y +100
• 09/18 $5B *UBS $1.25B 4.25NC3.25 +60, $700M 4.25NC3.25 SOFR+84, $1B 6NC5 +73, $300M 6NC5 SOFR+106, $1.75B 11.5NC10.5 +90
• 09/18 $1.5B *Credit Agricole 8NC7 +97
• 09/18 $750M *BAT Capital +7Y +85
• 09/18 $750M *Ferguson +5Y +70
• 09/18 $600M *Turk Eximbank 5Y 6.5%
• 09/18 $600M *Atmos Energy 30Y +77
• 09/18 $500M *Wisconsin Energy 5Y +50

MNI BONDS: EGBs-GILTS CASH CLOSE: Gilts Underperform On Renewed Fiscal Concerns

European curves bear steepened lightly Friday.

• Gilts underperformed, with the latest UK public sector borrowing figures showing further fiscal deterioration and weighing on the long-end.
• Elsewhere, the calendar was relatively light to conclude a busy week. In dovish-leaning data: German PPI came in below consensus, while French employment expectations weakening.
• With no impactful US data in the European afternoon, German and UK yields closed at/near both session and weekly highs.
• The UK and German curves both bear steepened on the day. Periphery / semi-core EGB spreads tightened around 1bp.
• The week as a whole saw light twist steepening in the UK curve (2Y -0.2bp, 10Y +4.4bp), with the German curve bear steepening (2Y +0.5bp, 10Y +3.3bp).
• Next week's European calendar is a little lighter, and headlined by September flash PMIs. 

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 1.2bps at 2.023%, 5-Yr is up 2bps at 2.326%, 10-Yr is up 2.2bps at 2.748%, and 30-Yr is up 2.8bps at 3.337%.
• UK: The 2-Yr yield is up 2.1bps at 3.982%, 5-Yr is up 2.9bps at 4.132%, 10-Yr is up 3.9bps at 4.715%, and 30-Yr is up 5.2bps at 5.559%.
• Italian BTP spread down 1.2bps at 78.5bps / Spanish down 1.2bps at 54.8bps

MNI FOREX: Notable Dollar Recovery Following Sharp Swings This Week

• The dollar index trades in positive territory Friday, exhibiting session gains of around 0.3% as we approach the close. Broadly, the greenback maintains a very supportive tone following the solid post-Fed recovery, with the DXY now residing ~1.5% above the fresh cycle lows that were printed on Wednesday. Despite the impressive 1.65% range this week, the DXY is just a modest 0.05% higher since last Friday’s close.
• The week’s most notable move was for EURUSD, given the pair briefly extended above 1.19 for the first time since mid-2021 and substantially narrowing the gap to the psychological and popular year-end forecast level of 1.2000. Short-term weakness back towards the 1.1750 region is considered technically corrective at this juncture.
• Keeping it in the majors, USDJPY also made a false range breakout, briefly sliding below the 146.21 bear trigger and sliding down to 145.50. Subsequently, a strong reversal has been assisted by a bullish candle pattern on Wednesday - a hammer formation - providing an early reversal signal. Immediate resistance is now at 148.27/28, and a continuation higher would open 149.14, the Sep 3 high. Notably, the pair shrugged off two hawkish dissents from BOJ board members, emphasising the renewed bearish pressure on the yen.
• Friday has provided a potentially pivotal moment for the UK and GBP. Overall, fiscal data shows that borrowing is overshooting the OBR's forecast YTD by GBP11.4bln providing a gloomy outlook as we approach the budget, and keeping sterling under pressure.
• GBPUSD has fallen 0.62% on Friday, and while the pair’s adjustment has been fairly in line with the broader dollar strength, a weekly close back below the 1.36 breakout point and below both the 20- and 50-day EMA’s is a bearish development. The next support to watch lies at 1.3433, a trendline support drawn from the Aug 1 low.
  • For EURGBP, we have risen back above 0.8700, renewing the focus on the year’s highs at 0.8769.
• Weaker economic data in both New Zealand and Australia notably dampened sentiment for AUD and NZD, however, it’s worth noting this week that AUDNZD looks set to close at the highest level in 3 years, above 1.1250.

MONDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
22/09/2025	1230/0830	*	CA	Industrial Product and Raw Material Price Index
22/09/2025	1230/1330		GB	BOE Pill At BIS-ECB-SUERF Workshop
22/09/2025	1345/1545		EU	ECB Lane At BIS-ECB-SUERF Workshop
22/09/2025	1345/0945		US	New York Fed's John Williams
22/09/2025	1400/1600	**	EU	Consumer Confidence Indicator (p)
22/09/2025	1400/1000		US	St. Louis Fed's Alberto Musalem
22/09/2025	1530/1130	*	US	US Treasury Auction Result for 13 Week Bill
22/09/2025	1530/1130	*	US	US Treasury Auction Result for 26 Week Bill
22/09/2025	1600/1200		US	Cleveland Fed's Beth Hammack
22/09/2025	1600/1200		US	Richmond Fed's Tom Barkin
22/09/2025	1715/1315		CA	BOC Sr Deputy speaks at LSE panel on supervision
22/09/2025	1800/1900		GB	BOE Bailey Fireside Chat On Supervision
22/09/2025	1945/1545		CA	BOC Deputy Kozicki speaks at BIS panel on central bank frameworks
23/09/2025	2300/0900	***	AU	Judo Bank Flash Australia PMI
23/09/2025	-		SE	Riksbank Meeting