MNI ASIA OPEN: No Data, No Cry
EXECUTIVE SUMMARY
- MNI US: Speaker Johnson Eyes Wednesday House Vote On Senate Funding Package
- MNI US LABOR MARKET: MNI US Employment Report: Mostly Steady Cooling Amidst The Fog
- MNI US FISCAL: CBO: October Deficit Shrinks, Shutdown/Timing Issues Muddy Comparison
US
StL Fed MUSALEM: WE HAVE LIMITED ROOM TO CUT RATES FURTHER; I SEE ECONOMY THAT HAS BEEN PRETTY RESILIENT, Bbg
Fed Gov MIRAN: AS OF NOW HALF-POINT CUT APPROPRIATE IN DECEMBER; SAYS SHUTDOWN DOESN'T AFFECT HIS VIEW OF ECONOMY, Bbg
NEWS
MNI US FISCAL: CBO: October Deficit Shrinks, Shutdown/Timing Issues Muddy Comparison
The Congressional Budget Office estimates that the federal government posted a $219B deficit in October, vs just over $258B a year earlier. This would still be one of the bigger October deficit in recent years but regarding that $39B Y/Y decrease: revenues were up $75B vs a year earlier, "driven by larger collections of individual income and payroll taxes and by increased customs duties", and while outlays were up $37B that was due to a timing shift without which outlays would have decreased (not increased) by $70B vs Oct 2024.
MNI US LABOR MARKET: MNI US Employment Report: Mostly Steady Cooling Amidst The Fog
We have published and e-mailed to subscribers the MNI US Employment Report covering a range of labor indicators for October in lieu of a second month of official data under the government shutdown. However, an imminent end to the shutdown could mean we get September’s BLS nonfarm payrolls release within the next week. The BLS Secretary has said the report will be issued "as soon as this government opens”.
MNI US: Speaker Johnson Eyes Wednesday House Vote On Senate Funding Package
House Speaker Mike Johnson (R-LA) told House Republicans during a private conference call today that GOP leadership is aiming for a Wednesday vote on the Senate funding package to reopen the government. According to Mychael Schnell at MCNBC, Johnson urged House Republicans to begin travelling back to Washington, DC, immediately, in light of shutdown-related travel issues.
MNI US: Senate Convenes To Work On Funding Package, Focus On Time Agreement
The US Senate has convened to begin consideration of the three-bill minibus appropriations package and Continuing Resolution to fund the government through January 30. The primary focus for markets is whether Senate Majority Leader John Thune (R-SD) and Senate Minority Leader Chuck Schumer (D-NY) can strike a deal to fast-track the process of reopening the government.
- As eight Democrats voted to invoke cloture on the package yesterday, the remaining procedural votes can be passed via a simple majority. However, absent a time agreement to wrap up the package today, any single Senator can delay the process for a few days.
MNI US: Consumer Sentiment Driven By Stock Market 'Wealth Effect' - WSJ
The Wall Street Journal reports that positive US consumer sentiment is largely being driven by a ‘wealth effect’ derived from a sustained bull run on the stock market: “Investors’ rosy feelings about having a lot more money—at least on paper—are powering spending on restaurant meals, business-class airline tickets, home improvement and more, keeping the broader economy humming.”
US TSYS
MNI US TSYS: Nearer The End of US Govt Shutdown
- Treasuries look to finish weaker, near the middle of Monday's range - optimism buoyed as the US Govt shutdown appears to be nearer an end after eight Democrats broke formation with colleagues to reopen the Govt.
- Stocks rallied, led by chip makers while Health Care sector shares continued to decline in the second half - if the US Govt shutdown ends without an extension of Affordable Care Act (ACA) subsidies.
- Reactions across G10 do not surprise, with the boost to risk assets filtering through to the underperforming JPY, while supporting the likes of AUD, NZD and NOK.
- Treasury futures pare losses slightly (TUZ5 104-04.88, -1.88) after $58B 3Y note auction (91282CPK1) stops through: drawing 3.579% high yield vs. 3.589% WI; 2.85x bid-to-cover vs. 2.66x prior.
- No economic data Monday, Tuesday limited to NFIB Small Business Optimism at 0600ET. Markets open for Veterans Day "holiday" - may weigh on volumes Tuesday.
OVERNIGHT DATA
No economic data Monday, Tuesday limited to NFIB Small Business Optimism at 0600ET.
MARKETS SNAPSHOT
Key market levels of markets in late NY trade:
DJIA up 396.93 points (0.84%) at 47376.66
S&P E-Mini Future up 106.75 points (1.58%) at 6859.5
Nasdaq up 534.2 points (2.3%) at 23537.78
US 10-Yr yield is up 1.8 bps at 4.1141%
US Dec 10-Yr futures are down 6.5/32 at 112-21
EURUSD down 0.0003 (-0.03%) at 1.1563
USDJPY up 0.63 (0.41%) at 154.05
WTI Crude Oil (front-month) up $0.39 (0.65%) at $60.14
Gold is up $110.69 (2.77%) at $4111.33
European bourses closing levels:
EuroStoxx 50 up 97.93 points (1.76%) at 5664.46
FTSE 100 up 104.58 points (1.08%) at 9787.15
German DAX up 390.03 points (1.65%) at 23959.99
French CAC 40 up 105.33 points (1.32%) at 8055.51
US TREASURY FUTURES CLOSE
3M10Y -0.238, 23.673 (L: 22.438 / H: 28.858)
2Y10Y -0.964, 52.328 (L: 51.355 / H: 54.253)
2Y30Y -2.026, 111.464 (L: 110.671 / H: 114.496)
5Y30Y -2.104, 99.206 (L: 98.621 / H: 101.673)
Current futures levels:
Dec 2-Yr futures down 2.125/32 at 104-4.625 (L: 104-03.75 / H: 104-05.75)
Dec 5-Yr futures down 4.75/32 at 109-7 (L: 109-04 / H: 109-10.25)
Dec 10-Yr futures down 6.5/32 at 112-21 (L: 112-15 / H: 112-26)
Dec 30-Yr futures down 5/32 at 116-29 (L: 116-10 / H: 117-06)
Dec Ultra futures down 3/32 at 120-21 (L: 119-25 / H: 120-29)
MNI US 10YR FUTURE TECHS: (Z5) Bear Threat Still Present
- RES 4: 114-02 High Oct 17 and the bull trigger
- RES 3: 113-29 High Oct 22
- RES 2: 113-18+ High Oct 28
- RES 1: 113-02 High Nov 5& 7 and a key near-term resistance
- PRICE: 112-22 @ 1215 ET Nov 10
- SUP 1: 112-09+ Low Nov 5
- SUP 2: 112-08+ 38.2% retracement of May - Oct Upleg
- SUP 3: 112-07+/06 100-dma / Low Sep 25 and a reversal trigger
- SUP 4: 112-01+ Trendline support drawn from the May 22 low
Treasuries are trading below last week’s high and closer to recent lows. This highlights a bear threat and attention is on a reversal trigger at 112-06, the Sep 25 low, and the 100-DMA, at 112-07+. A clear break of these price points would expose a trendline support at 112-01+. The trendline is drawn from the May 22 low. Resistance to watch is 113-02, the Nov 5 and 7 high. Clearance of this level would highlight a potential bullish reversal.
SOFR FUTURES CLOSE
Current White pack (Dec 25-Sep 26):
Dec 25 -0.025 at 96.225
Mar 26 -0.030 at 96.430
Jun 26 -0.035 at 96.655
Sep 26 -0.035 at 96.805
Red Pack (Dec 26-Sep 27) -0.04 to -0.035
Green Pack (Dec 27-Sep 28) -0.035 to -0.03
Blue Pack (Dec 28-Sep 29) -0.03 to -0.025
Gold Pack (Dec 29-Sep 30) -0.02 to -0.02
REFERENCE RATES
US TSYS: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 3.93% (+0.01), volume: $3.069T
- Broad General Collateral Rate (BGCR): 3.89% (+0.00), volume: $1.216T
- Tri-Party General Collateral Rate (TCR): 3.89% (+0.00), volume: $1.192T
- (rate, volume levels reflect prior session)
STIR: FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 3.87% (+0.00), volume: $83B
- Daily Overnight Bank Funding Rate: 3.87% (+0.00), volume: $162B
FED Reverse Repo Operation
RRP usage rises to $7.152B with 11 counterparties this afternoon from $4.903B Friday. Compares to $2.435B on October 24 (lowest level since mid-March 2021) and the year's highest usage of $460.731B on June 30.
MNI PIPELINE: Corporate Bond Update: Near $20B to Price Monday
$19.95B To Price Monday:
- Date $MM Issuer (Priced *, Launch #)
- 11/10 $11B #Verizon: $2B +7Y +90, $2.25B +10Y +100, $1.5B 20Y +110, $3.25B 30Y +120, $2B 40Y +130
- 11/10 $1.65B #Enterprise Products Op $300M 3Y Tap +43, $600M 5Y Tap+73, $750M 10Y tap +93
- 11/10 $1.6B #Caterpillar $1.05B 3Y +37, $550M 3Y SOFR+58
- 11/10 $1.5B #LyondellBasell $500M 5Y +145, $1B 10Y +185
- 11/10 $900M *Mosaic $500M +3Y +77, $400M 5Y +92
- 11/10 $750M #Flex $150M 7Y +105, $600M 10Y +130
- 11/10 $750M #Plains All American $300M 5Y +102, $450M 10Y +142
- 11/10 $700M Carpenter Tech 8.25NC3.25 5.75%
- 11/10 $600M #AutoNation +3Y +90
- 11/10 $500M #Illumina WNG 5Y +105
- 11/10 $2.35B Applied Digital 5NC2 investor call, expected to launch Thursday
MNI BONDS: EGBs-GILTS CASH CLOSE: Core Curves Twist Flatten Ahead Of UK Labour Data
European curves flattened Monday.
- An apparent breakthrough in the US federal government shutdown over the weekend saw core instruments on the back foot early.
- But the rise in yields at the open would mark the highs for the day in Bunds and Gilts, with a fairly steady descent throughout the rest of the session.
- This was mainly following the trajectory of Treasuries paring losses as opposed to European macro/headline cues, though Bunds and Gilts would outperform their US counterparts on the day.
- UK Chancellor Reeves made the clearest indications yet that the government would break manifesto pledges not to raise income/NIC/VAT taxes.
- Periphery/semi-core EGBs outperformed alongside a risk-on rally in equities, with BTPs and OATs spreads tightening most.
- The German and UK curves both twist flattened, with Bunds slightly underperforming Gilts.
- The highlight of the week's calendar is UK labour market data out Tuesday - MNI's preview is here. The main focus is on private regular earnings, and we see risks to consensus expectations as tilted slightly to the upside.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is up 1.5bps at 2.005%, 5-Yr is up 1.2bps at 2.268%, 10-Yr is up 0.2bps at 2.668%, and 30-Yr is down 0.6bps at 3.26%.
- UK: The 2-Yr yield is up 0.9bps at 3.807%, 5-Yr is up 0.7bps at 3.935%, 10-Yr is down 0.5bps at 4.461%, and 30-Yr is down 1.1bps at 5.239%.
- Italian BTP spread down 2.3bps at 74.4bps / French OAT down 2.2bps at 77.5bps
MNI FOREX: Equity Sentiment Key to AUD Outperformance, JPY Under Pressure
- Renewed optimism surrounding the US government reopening have significantly boosted risk sentiment, prompting the US Dollar to consolidate last week's losses. Reactions across G10 do not surprise, with the boost to risk assets filtering through to the underperforming JPY, while supporting the likes of AUD, NZD and NOK.
- USDJPY rose sharply from the open and extended gains to a 154.25 high on Monday. The pair has once again met some resistance above the 154.00 handle, registering a seventh daily high between 154.14-154.48, bolstering the short-term significance of this resistance cluster. First important support to watch lies at 152.68, the 20-day EMA.
- AUD received further tailwinds from RBA Hauser comments being on the hawkish side. For AUDUSD (+0.70%), a break above key resistance at 0.6618 (Oct 29 high) would be required to reinstate a bullish theme.
- NOK meanwhile also benefits from an upside surprise to domestic October CPI. A December cut was already unlikely following last week's Norges Bank meeting and the prospects of that are likely to fall back even further. EURNOK has extended the pullback from 11.80, potentially forming a double top pattern multi-week.
- ZAR (+1%) outperforms in the emerging market space, very much a product of the precious metals rally (gold +2.5%, silver +4%), which adds further support to the positive risk backdrop, boosting higher beta currencies. Latin American currencies have followed suit, with all regional currencies rising Monday.
- Key to watch in the days ahead will be further developments on the shutdown, with a handful of legislative hurdles still to be met. UK labour market data takes focus Tuesday, while NZ inflation expectations and German ZEW also cross.
TUESDAY DATA CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 11/11/2025 | 0700/0700 | *** |  GB | Labour Market - AWE & Unemployment |
| 11/11/2025 | 0700/0700 | *** | GB | Labour Market - AWE & Unemployment |
| 11/11/2025 | 0700/0700 | *** | GB | Labour Market - Payrolls & Claimants |
| 11/11/2025 | 0700/0700 | *** | GB | Labour Market - Payrolls & Claimants |
| 11/11/2025 | 0820/0920 |  EU | ECB Lagarde Video Message at Bank of Albania | |
| 11/11/2025 | 0830/0930 |  SE | Riksbank Minutes | |
| 11/11/2025 | 0830/0830 | GB | BOE Greene in Panel at UBS European Conference | |
| 11/11/2025 | 1000/1100 | *** |  DE | ZEW Current Expectations Index |
| 11/11/2025 | 1100/0600 | ** |  US | NFIB Small Business Optimism Index |
| 11/11/2025 | 1200/0700 | ** |  BR | Brazil Final CPI |
| 11/11/2025 | 1200/1200 | GB | BOE APF Quarterly Report | |
| 11/11/2025 | - | *** |  CN | Money Supply |
| 11/11/2025 | - | *** | CN | New Loans |
| 11/11/2025 | - | *** | CN | Social Financing |
| 11/11/2025 | 1355/0855 | ** | US | Redbook Retail Sales Index |
| 11/11/2025 | 0325/2225 | US | Fed Governor Michael Barr |
