MNI ASIA OPEN: Philly Fed Paulson sees 2 More Cuts for 2025
EXECUTIVE SUMMARY
- MNI FED: Philly's Paulson: 2026 "Long Way Off" In Rate Views
- MNI FED: Philadelphia's Paulson: 2 More Cuts This Year, More Uncertainty Over 2026
- MNI US: GOP/Trump Gets More Blame For Shutdown, Unclear If It Will Help Dems - Ipsos
US
MNI FED: Philadelphia's Paulson: 2 More Cuts This Year, More Uncertainty Over 2026
In her first commentary on monetary policy since becoming Philadelphia Fed president in the summer, Anna Paulson (non-2025 FOMC voter, votes in 2026) said in a speech Monday that with rates "modestly restrictive now", she sees easing through year-end in line with the September SEP median - in other words, two more cuts by year-end. That's in line with MNI's assumption of her view.
- For 2026, when she is an FOMC voter, she sounds far less certain: "But first, what about next year? I see two important questions for monetary policy to grapple with in 2026. The first question is: What is the neutral policy rate? And the second question is: How quickly should policy move to neutral? My short answer to these questions is: I don’t know, and because I don’t know, we should proceed cautiously."
MNI FED: Philly's Paulson: 2026 "Long Way Off" In Rate Views
Asked in Q&A if she's in line with the Dot Plot median for 3.4% rates at end-2026 (when she is an FOMC voter) as well as her stated view that she agrees with the FOMC median estimate for 2 more cuts the rest of this year, Philly Fed's Paulson doesn't reveal much, saying "I think next year we're going to have to really evaluate the data as it comes in. We're going to have to see what happens, both with inflation and with employment and with growth. Right? I mean, I think next year is is a long way off right now." On where she sees the neutral rate: "We're really going to have to feel our way."
NEWS
MNI US: GOP/Trump Gets More Blame For Shutdown, Unclear If It Will Help Dems - Ipsos
New polling from Ipsos has suggested that the government shutdown might hurt Republicans and President Donald Trump more than it would hurt Democrats. However, "At the same time, there aren’t any glaring signs that it will help Democrats, who have been struggling with their own lack of popularity. Ultimately, while the fate of this shutdown is uncertain, one thing that seems likely is that this shutdown will only reinforce partisan entrenchment and disillusionment.”
- Ipsos notes, “A majority of Americans are at least somewhat concerned about the government shutdown, though it’s not very concerning to most… No side will leave this shutdown unscathed. Democrats in Congress, Republicans in Congress, and President Trump receive at least some blame in the eyes of the public.”
- Ipsos adds, “How hard do Americans want their side to fight? It depends. Half of America would prefer their leaders stand up for their issue positions at the cost of a shutdown. Independents would rather see a compromise. The most likely end result: more disillusionment.”
MNI SECURITY: Trump To Meet Zelenskyy At White House On Thursday - FT
US President Donald Trump will meet Ukrainian President Volodymyr Zelenskyy at the White House on Thursday, per reporting from the Financial Times. The meeting comes as the Trump administration's pivot toward Kyiv has yet to be backed with new penalties on Moscow, and Trump weighs supplying Ukraine with long-range missiles. News of the meeting comes after the pair spoke on Saturday, with Zelenskyy urging Trump to use the momentum from the Gaza peace deal to take a more assertive role in a Ukraine ceasefire.
MNI JAPAN: Oppo. Parties To Meet 14 Oct; Komeito May Back Non-LDP PM Candidate
The secretaries-general of the three main opposition parties: the liberal Constitutional Democratic Party (CDP), the libertarian federalist Japan Innovation Party (Ishin), and the conservative populist Democratic Party for the People (DPFP), are due to hold talks on 14 Oct regarding the prospect of an alliance to elect a new PM. There remains the prospect that the three parties could look to unite and present a joint prime ministerial candidate in the National Diet session (likely 20/21 Oct), where a successor to the outgoing PM, Shigeru Ishiba, will be elected.
US TSYS
MNI US TSYS: Tsys Rebound Late, 2s-10s Leading on Subdued Holiday Trade
- Treasury look to settle mixed, bonds weaker on very light volumes (TYZ5 670k) due to the Columbus Day holiday. The Dec'25 10Y contract currently trades at 113-05.5 (+1) - rebounding late with no obvious headline of Block-driven support.
- Normal Globex trade hours, stocks open - recovering approximately half of Friday's rout: the DJIA trades up 575.86 points (1.27%) at 46,057.31, S&P E-Minis up 98 points (1.49%) at 6,693, Nasdaq up 467.7 points (2.1%) at 22,674.98.
- No data, but Philly Fed Pres Anna Paulson (non-2025 FOMC voter, votes in 2026) said in a speech Monday that with rates "modestly restrictive now", she sees easing through year-end in line with the September SEP median - in other words, two more cuts by year-end. That's in line with MNI's assumption of her view.
- More Fed speakers tomorrow with focus on Chairman Powell's economic outlook keynote address at the NABE Annual Meeting at 1220ET.
OVERNIGHT DATA
No scheduled data Monday, cash Tsys closed due to Columbus Day holiday, Globex full session. Focus on Fed Chair Powell's economic outlook at NABE meeting Tuesday at 1220ET.
MARKETS SNAPSHOT
Key market levels of markets in late NY trade:
DJIA up 551.58 points (1.21%) at 46029.48
S&P E-Mini Future up 97.5 points (1.48%) at 6692.5
Nasdaq up 481 points (2.2%) at 22686.65
US 10-Yr yield is unchanged 0 bps at 4.0322%
US Dec 10-Yr futures are up 0.5/32 at 113-5
EURUSD down 0.0046 (-0.4%) at 1.1573
USDJPY up 1.08 (0.71%) at 152.27
WTI Crude Oil (front-month) up $0.67 (1.14%) at $59.57
Gold is up $83.69 (2.08%) at $4101.53
European bourses closing levels:
EuroStoxx 50 up 36.87 points (0.67%) at 5568.19
FTSE 100 up 15.4 points (0.16%) at 9442.87
German DAX up 146.47 points (0.6%) at 24387.93
French CAC 40 up 16.26 points (0.21%) at 7934.26
US TREASURY FUTURES CLOSE
3M10Y +0, 8.212 (L: 8.212 / H: 8.212)
2Y10Y +0, 52.857 (L: 52.857 / H: 52.857)
2Y30Y +0, 111.509 (L: 111.509 / H: 111.509)
5Y30Y +0.174, 99.22 (L: 99.22 / H: 99.22)
Current futures levels:
Dec 2-Yr futures up 1.375/32 at 104-12.125 (L: 104-09.375 / H: 104-12.375)
Dec 5-Yr futures up 1.75/32 at 109-19.5 (L: 109-13.75 / H: 109-20)
Dec 10-Yr futures up 0.5/32 at 113-5 (L: 112-30 / H: 113-06)
Dec 30-Yr futures down 4/32 at 117-30 (L: 117-11 / H: 118-00)
Dec Ultra futures down 4/32 at 121-31 (L: 121-04 / H: 122-01)
MNI US 10YR FUTURE TECHS: (Z5) Has Cleared Resistance
- RES 4: 114-10 High Apr 7 (cont.)
- RES 3: 114-00 Round number resistance
- RES 2: 113-12/29 High Sep 18 / High Sep 11 and the bull trigger
- RES 1: 113-09 High Oct 10
- PRICE: 113-02 @ 14:23 BST Oct 13
- SUP 1: 112-14/01 50-day EMA / 50.0% of Jul 15 - Sep 11 upleg
- SUP 2: 111-26 Low Aug 26
- SUP 3: 111-13+ Low Aug 18 and a key support
- SUP 4: 111-01+ 76.4% retracement of the Jul 15 - Sep 11 bull phase
Treasury prices rallied sharply on Friday resulting in a breach of resistance at the 113-00 handle. The break signals scope for a test of 113-12, the Sep 18 high, where a breach would expose 113-29, the Sep 11 high and a bull trigger. On the downside, support at the 50-day EMA at 112-14 remains intact for now. A clear break of the average would expose 111-13+, the Aug 18 low and a key support.
SOFR FUTURES CLOSE
Current White pack (Dec 25-Sep 26):
Dec 25 +0.005 at 96.370
Mar 26 +0.015 at 96.60
Jun 26 +0.025 at 96.830
Sep 26 +0.025 at 96.975
Red Pack (Dec 26-Sep 27) +0.025 to +0.030
Green Pack (Dec 27-Sep 28) +0.015 to +0.025
Blue Pack (Dec 28-Sep 29) +0.010 to +0.015
Gold Pack (Dec 29-Sep 30) steadysteady0 to +0.010
REFERENCE RATES (Not updated due to Columbus Day holiday, levels below from prior session)
US TSYS: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 4.13% (+0.01), volume: $2.923T
- Broad General Collateral Rate (BGCR): 4.10% (+0.01), volume: $1.148T
- Tri-Party General Collateral Rate (TCR): 4.10% (+0.01), volume: $1.120T
- (rate, volume levels reflect prior session)
STIR: FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 4.10% (+0.00), volume: $84B
- Daily Overnight Bank Funding Rate: 4.10% (+0.00), volume: $174B
FED Reverse Repo Operation
No RRP usage reported Monday due to the Columbus Day holiday, usage had extended to new low of $4.124B (lowest level since early April 2021) with 10 counterparties last Friday. Compares to this year's high usage of $460.731B on June 30.
PIPELINE
No new corporate bond issuance Monday
MNI BONDS: EGBs-GILTS CASH CLOSE: Bond Bid Holds Despite Equity Bounce
Periphery/semi-core EGBs outperformed Monday amid a broader fall in yields.
- Core yields ticked higher in early trade, with Friday's late fall triggered by escalation in US-China trade tensions fading after conciliatory tones over the weekend.
- From there, core FI regained ground and bid despite an equity recovery, with global price action thinned by North American holidays. Periphery/semi-core EGB spreads tightened on the day.
- Friday's news after the cash close that French President Macron had reappointed Lecornu as PM may have curtailed further OAT/Bund compression but OATs closed Monday roughly in line with peer credits.
- BOE's Greene noted a case for higher-for-longer rates and skipping a cut, in line with prior remarks.
- German instruments outperformed UK counterparts out through the 10Y segment, with Gilts stronger in the long-end.
- Tuesday's highlight is UK labour market data - MNI's preview is here. We also get the German ZEW survey and appearances by BOE's Bailey and Taylor, and ECB''s Makhlouf, Kocher and Villeroy.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 1.5bps at 1.944%, 5-Yr is down 1.9bps at 2.217%, 10-Yr is down 0.8bps at 2.636%, and 30-Yr is down 0.1bps at 3.224%.
- UK: The 2-Yr yield is down 0.8bps at 3.95%, 5-Yr is down 1.7bps at 4.101%, 10-Yr is down 1.7bps at 4.658%, and 30-Yr is down 0.9bps at 5.463%.
- Italian BTP spread down 2bps at 79.8bps / Spanish down 0.9bps at 54.4bps
MNI FOREX: JPY Weakness Persists, GBP Resilience to be Tested With Jobs Print
- The early Monday JPY fade persisted through the London close, prompting JPY to comfortably underperform all others in G10. USD/JPY is back above 152.00, but a further rally above 152.64 will be needed to erase the sell-off triggered by Trump's threats to raise tariffs on China on Friday. Politics remains a key driver of the currency, with opposition parties set to meet tomorrow to discuss the collapse of the governing coalition last week. These meetings could help determine whether Takaichi goes ahead with a minority government, or looks to bring forward elections.
- Focus Tuesday shifts to the return in earnest for US markets and the upcoming beginning of earnings season in the US. Financials are the early focus, with most major Wall Street names set to report. 7.4% of the index are set to report between now and Friday, and this quarter’s earnings will be the first to fully reflect the signs of passthrough of tariffs, making those with high exposure to international trade a particular focus.
- Final German CPI data for September is expected to come in unrevised, while the UK jobs data and numerous MPC appearances take focus for GBP. Into the MPC speeches and the run of UK data, GBP/USD is off last week's lows, but inside the Friday range. This leaves the 1.3262 low as key support this week, a break below which exposes the 200-dma of 1.3178 and levels last seen at the beginning of August. It remains difficult to see a protracted GBP/USD sell-off absent a move in the USD however, and with an October Fed rate cut fully priced, there may be limits on how much further the greenback
can rally from here. - Lastly, AUD is stronger against the broader G10 complex, buoyed by both the stronger risk sentiment as a result of Trump's moderation in language toward China, as well as the continued surge in gold prices, which put the price through to record highs once again. The 0.6560 50-day EMA marks the next upside level, which would go further in erasing last week's sell-off. This comes after Friday's support breaks undermined a recent bullish theme, potentially signaling scope for a deeper retracement towards key support at 0.6415, the Aug 21 and 22 low.
TUESDAY DATA CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 14/10/2025 | 0600/0700 | *** |  GB | Labour Market - AWE & Unemployment |
| 14/10/2025 | 0600/0700 | *** | GB | Labour Market - AWE & Unemployment |
| 14/10/2025 | 0600/0700 | *** | GB | Labour Market - AWE & Unemployment |
| 14/10/2025 | 0600/0800 | *** |  DE | Germany CPI (f) |
| 14/10/2025 | 0600/0700 | *** | GB | Labour Market - Payrolls & Claimants |
| 14/10/2025 | 0600/0700 | *** | GB | Labour Market - Payrolls & Claimants |
| 14/10/2025 | 0600/0800 | *** | DE | Germany CPI (f) |
| 14/10/2025 | 0750/0950 |  EU | ECB Cipollone Speech on Digital Euro | |
| 14/10/2025 | 0900/1100 | *** | DE | ZEW Current Expectations Index |
| 14/10/2025 | 1000/0600 | ** |  US | NFIB Small Business Optimism Index |
| 14/10/2025 | - | *** |  CN | Money Supply |
| 14/10/2025 | - | *** | CN | New Loans |
| 14/10/2025 | - | *** | CN | Social Financing |
| 14/10/2025 | - | EU | ECB Lagarde and Cipollone at G20 Meeting | |
| 14/10/2025 | 1200/1300 | GB | BOE Taylor Remarks and Fireside Chat at University of Cambridge | |
| 14/10/2025 | 1230/0830 | * |  CA | Building Permits |
| 14/10/2025 | 1245/0845 | US | Fed Governor Michelle Bowman | |
| 14/10/2025 | 1255/0855 | ** | US | Redbook Retail Sales Index |
| 14/10/2025 | 1530/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
| 14/10/2025 | 1530/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
| 14/10/2025 | 1610/1210 | CA | BOC Sr Deputy Rogers fireside talk in Vancouver | |
| 14/10/2025 | 1620/1220 | US | Fed Chair Jerome Powell | |
| 14/10/2025 | 1700/1800 | GB | BOE Bailey Fireside Chat at Institute of International Finance | |
| 14/10/2025 | 1925/1525 | US | Fed Governor Christopher Waller | |
| 14/10/2025 | 1930/1530 | US | Boston Fed's Susan Collins | |
| 15/10/2025 | 0130/0930 | *** | CN | CPI |
| 15/10/2025 | 0130/0930 | *** | CN | Producer Price Index |
| 15/10/2025 | 0430/1330 | ** |  JP | Industrial Production |
