MNI ASIA OPEN: Rate Cut Pricing Cools Ahead Eco Summit

EXECUTIVE SUMMARY

• MNI FED: Jackson Hole: Schedule Out At 8pm ET
• MNI FED: Cleveland's Hammack: Don't See Case For September Cut With Current Data
• MNI SECURITY: Trump Hints At Increased Military Support For Ukraine
• MNI US DATA: Existing Home Sales Pick Up In July, But Activity And Prices Soft
• MNI US DATA: Weak Philly Fed Mfg Activity With Higher Prices, But Outlook Brightens
• MNI US DATA: Claims Suggest Still Low Fire But Slightly Lower Hire Labor Market

US

MNI FED: Jackson Hole: Schedule Out At 8pm ET

This year’s Jackson Hole symposium theme is “Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Policy." The full Jackson Hole schedule will be released this evening (Thursday) at 2000ET (0100UK time early Friday morning), which will include the various academic paper presentations. The full Symposium website is here (which will include links to papers, livestreams, and schedule): https://www.kansascityfed.org/research/jackson-hole-economic-symposium/

MNI FED: Cleveland's Hammack: Don't See Case For September Cut With Current Data

Cleveland Fed President Hammack (non-2025 FOMC voter but votes in 2026; hawk) echoes earlier commentary today from the sidelines of Jackson Hole from KC's Schmid (a fellow hawk) in casting doubt on the necessity of a September rate cut. Going into Jackson Hole, we thought she was one of 10 (of 18) FOMC members that sounded open-minded enough in previous commentary to be persuadable on a September cut - but now the balance on the Committee clearly tips to 4 in favor/9 undecided/5 opposed. 

• Hammack says: "I think that there's a lot of data we're going to get between now and September. And I walk into every meeting with an open mind about what the right thing to do is. But with the data I have right now, and with the information I have, if the meeting was tomorrow, I would not see a case for reducing interest rates."

NEWS

MNI SECURITY: Trump Hints At Increased Military Support For Ukraine

US President Donald Trump has issued a statement on Truth Social, appearing to suggest that former US President Joe Biden hindered the Ukrainian war effort by restricting Kyiv’s ability to strike targets within the Russian Federation. Trump: “It is very hard, if not impossible, to win a war without attacking an invaders country. It’s like a great team in sports that has a fantastic defense, but is not allowed to play offensive. There is no chance of winning! It is like that with Ukraine and Russia. Crooked and grossly incompetent Joe Biden would not let Ukraine FIGHT BACK, only DEFEND defend. How did that work out? ... Interesting times ahead!!!”

MNI RUSSIA: RTRS-Putin's Demands For Peace-All Of Donbas, No NATO, No Western Troops

Reuters reports that as part of any peace deal with Ukraine, Russian President Vladimir Putin has four key demands of Kyiv: a full ceding of the Donbas, a formal renunciation of ambitions to join NATO, a commitment to neutrality, and no Western peacekeepers on Ukrainian soil. Reuters reports that the Russians view this as a compromise, as Moscow would only take the areas of Kherson and Zaporizhzhia currently under the control of their forces, rather than the entire oblasts. 

MNI TARIFFS: Select Comments On EU Trade And India From Navarro Press Gaggle

Senior White House Trade Counsellor Peter Navarro has spoken briefly to reporters at the White House on issues related to trade. On today's US-EU trade framework, Navarro cites imbalances in the trade relationship as a ‘national security emergency’ and says “President Trump got up to the top of the mountain today [in securing a trade deal]”.

• Navarro: “We get Europe reducing tariffs to zero. We continue our [15%] global tariff to fight the trade deficit... We will impose 15% tariffs on autos, it’s a drop from the 25%, but [up from 2.5% when] Trump took office, compared to 10% in Europe, so that’s a great win.”

US TSYS

MNI US TSYS: Treasury Yields Rise Ahead Jackson Hole Symposium

• Treasuries are holding weaker levels, off lows after the bell - inside session ranges followed mixed data with hawkish Fed comments setting the tone in the first half. Heavy overall volumes (TYU5 over 2.4M) due to quarterly futures roll and option hedging ahead Sep'25 expiry tomorrow, rather than active position taking.
• Many participants plied the sidelines ahead tomorrow's Jackson Hole economic symposium with Fed Chairman Powell speaking at 1000ET. The full Jackson Hole schedule will be released this evening (Thursday) at 2000ET (0100UK time early Friday morning), which will include the various academic paper presentations. The full Symposium website is here (which will include links to papers, livestreams, and schedule): https://www.kansascityfed.org/research/jackson-hole-economic-symposium/
• Treasuries gained following this morning's higher than expected weekly jobless and cointinuing claims: Initial claims increased to 235k (sa, cons 225k) in the week to Aug 16 – a payrolls reference period – after an unrevised 224k. Continuing claims meanwhile also surprised higher with 1972k (sa, cons 1960k) in the week to Aug 9 after a downward revised 1942k (initial 1953k).
• Cleveland Fed President Hammack (non-2025 FOMC voter but votes in 2026; hawk) echoes earlier commentary today from the sidelines of Jackson Hole from KC's Schmid (a fellow hawk) in casting doubt on the necessity of a September rate cut. "with the data I have right now, and with the information I have, if the meeting was tomorrow, I would not see a case for reducing interest rates."
• Weaker rates saw projected rate cuts continue to cool vs. early morning (*) levels: Sep'25 at -18bp (-19.6bp), Oct'25 at -30.1bp (-32.1bp), Dec'25 at -48bp (-51.4bp), Jan'26 at -58.6bp (-62.6bp).

OVERNIGHT DATA

MNI US DATA: Claims Suggest Still Low Fire But Slightly Lower Hire Labor Market

Jobless claims were higher than expected in latest data for both initial and continuing claims. Initial claims are still relatively low historically and show little sign of worrying layoffs whilst continuing claims continue to point to tougher re-hiring prospects but not particularly worse than recent months. The latter is especially true when considering a sustained pattern of downward revisions.  

• Initial claims increased to 235k (sa, cons 225k) in the week to Aug 16 – a payrolls reference period – after an unrevised 224k. It’s the highest single week since the week to Jun 21 after some particularly low readings, leaving mixed comparison to recent payroll reference periods with just 221k in the July period after 246k in June. Continuing claims meanwhile also surprised higher with 1972k (sa, cons 1960k) in the week to Aug 9 after a downward revised 1942k (initial 1953k).

MNI US DATA: Weak Philly Fed Mfg Activity With Higher Prices, But Outlook Brightens

The Philadelphia Fed's Business Outlook survey showed a bigger-than-expected relapse in regional manufacturing activity in August, along with a continued surge in prices paid - making for a largely stagflationary report, albeit with some improvement in forward-looking indicators. The a -0.3 reading for current general business conditions (6.5 expected, 15.9 prior) brought it back negative where it had been for 4 consecutive months amid tariff-related concerns, before jumping to a 5-month high in July.

MNI US DATA: Existing Home Sales Pick Up In July, But Activity And Prices Soft

Existing home sales picked up in July, to 4.01M (seasonally adjusted, annual rate), from 3.93M prior and vs expectations of a slight decline (3.92M). This brings the pace of sales back up above the 4M mark after June's 9-month low.

• Months of supply (inventory vs the current pace of sales) fell slightly (4.6 vs 4.7) though remains at elevated levels, suggesting the loosest housing market conditions in a decade. As such, median price growth slowed to slow: at $422.4k (median, NSA), growth was just 0.2% Y/Y, weakest since the declines of Q2 2023.

MNI CANADA DATA: July Industrial Prices +2.6% YOY, 10th Consecutive Increase on Gold

Industrial Price Index +2.6% YOY in July, tenth straight increase led by precious metals mainly due to strong investment in gold, seen as a safe haven for the past twelve months. Beef and softwood lumber were also key contributors. Index +0.7% MOM in July after +0.5% in June driven by energy and petroleum.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA down 145.88 points (-0.32%) at 44793.78
S&P E-Mini Future down 21.25 points (-0.33%) at 6392.75
Nasdaq down 57.3 points (-0.3%) at 21116.72
US 10-Yr yield is up 3.7 bps at 4.3277%
US Sep 10-Yr futures are down 10/32 at 111-17.5
EURUSD down 0.0045 (-0.39%) at 1.1607
USDJPY up 1.07 (0.73%) at 148.4
#VALUE!
Gold is down $6.93 (-0.21%) at $3341.26

European bourses closing levels:
EuroStoxx 50 down 10.16 points (-0.19%) at 5462.16
FTSE 100 up 21.06 points (0.23%) at 9309.2
German DAX up 16.37 points (0.07%) at 24293.34
French CAC 40 down 34.74 points (-0.44%) at 7938.29

US TREASURY FUTURES CLOSE

3M10Y +2.198, 8.887 (L: 4.667 / H: 10.185)
2Y10Y -0.485, 53.589 (L: 52.747 / H: 55.318)
2Y30Y -1.333, 113.158 (L: 111.914 / H: 116.032)
5Y30Y -1.514, 106.632 (L: 105.844 / H: 109.432)
Current futures levels:
Sep 2-Yr futures down 2.75/32 at 103-24.125 (L: 103-23.25 / H: 103-27.125)
Sep 5-Yr futures down 6.5/32 at 108-19.5 (L: 108-17.5 / H: 108-26.25)
Sep 10-Yr futures down 9.5/32 at 111-18 (L: 111-14.5 / H: 111-29) 
Sep 30-Yr futures down 11/32 at 114-2 (L: 113-24 / H: 114-19)
Sep Ultra futures down 13/32 at 116-23 (L: 116-09 / H: 117-10)

MNI US 10YR FUTURE TECHS: (U5) Bullish Outlook

• RES 4: 113-23   76.4% retracement of the Sep’24 - Jan’25 sell-off
• RES 3: 113-07   76.4% retracement of the Apr 7 - 11 sell-off
• RES 2: 112-23   High May 1
• RES 1: 112-15+ High Aug 5 and the bull trigger
• PRICE:‌‌ 111-23+ @ 11:25 BST Aug 21
• SUP 1: 111-12   50-day EMA        
• SUP 2: 110-23+/08+ Low Aug 1 / Low Jul 15 & 16
• SUP 3: 110-03   76.4% retracement of the May 22 - Jul 1 bull leg
• SUP 4: 109-28   Low Jun 6 and 11 

A bullish theme in Treasury futures remains intact and the contract continues to trade above support at the 50-day EMA, at 111-12. A clear break of this average would expose support at 110-23+, the Aug 1 low. For bulls, a resumption of gains would refocus attention on 112-15+, the Aug 5 high and a  bull trigger. Clearance of this hurdle would resume the uptrend and pave the way for a climb towards 112-23 initially, the May 1 high.

SOFR FUTURES CLOSE

Sep 25 -0.038 at 95.858
Dec 25 -0.070 at 96.140
Mar 26 -0.065 at 96.375
Jun 26 -0.055 at 96.615
Red Pack (Sep 26-Jun 27) -0.045 to -0.03
Green Pack (Sep 27-Jun 28) -0.045 to -0.035
Blue Pack (Sep 28-Jun 29) -0.05 to -0.045
Gold Pack (Sep 29-Jun 30) -0.045 to -0.04

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

• Secured Overnight Financing Rate (SOFR): 4.31% (-0.02), volume: $2.704T
• Broad General Collateral Rate (BGCR): 4.30% (-0.01), volume: $1.140T
• Tri-Party General Collateral Rate (TCR): 4.30% (-0.01), volume: $1.114T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $115B
• Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $269B

FED Reverse Repo Operation

RRP usage slips to $25.358B this afternoon from $34.999B yesterday -- compares to $22.344B on Tuesday, Aug 19 - lowest since April 5, 2021. Total number of counterparties at 17. This week's retreat compares this year's high usage of $460.731B on June 30.

MNI PIPELINE: Corporate Bond Update: $2B Quebec 10Y SOFR Priced

• Date $MM Issuer (Priced *, Launch #)
• 08/20 $2B *Quebec 10Y SOFR+89
• 08/20 $1B *Nordic Investment Bank WNG 3Y SOFR+30

MNI BONDS: EGBs-GILTS CASH CLOSE: PMIs See Yields Rise

Strong global purchasing managers' indices released Thursday saw European yields reverse much of the prior session's fall.

• Rates sold off on stronger-than-expected Eurozone and UK August flash composite PMIs (though EZ Manufacturing beat with Services missing, whereas in the UK it was vice-versa). Latest UK monthly public finance data looked a little better than expected but was marred by revisions to the Apr-Jun data.
• Combined with very strong US PMIs combined with hawkish Fed-speak, there was plenty to keep the pressure on both ends of the yield curve through the cash close.
• The German curve leaned bear flatter, with underperformance in the belly, while Gilts underperformed overall in a bear-steepening move with 10Y the weakest segment.
• Periphery / semi-core EGB spreads widened steadily throughout the session as equities remained under pressure from the higher yield environment - 10Y BTP/Bund closed at its widest level in 13 sessions (Aug 4).
• The regional calendar includes Q2 Eurozone negotiated wage data, German final GDP, and French manufacturing confidence, with global attention on Federal Reserve Chair Powell's Jackson Hole speech on Friday (1500 UK time).

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 3.9bps at 1.972%, 5-Yr is up 4.2bps at 2.315%, 10-Yr is up 4bps at 2.757%, and 30-Yr is up 3.3bps at 3.327%.
• UK: The 2-Yr yield is up 4.8bps at 3.97%, 5-Yr is up 4.8bps at 4.124%, 10-Yr is up 5.7bps at 4.729%, and 30-Yr is up 4.7bps at 5.578%.
• Italian BTP spread up 1.6bps at 82.4bps / French OAT up 1.2bps at 70.7bps

MNI FOREX: USD Index Extends Bounce as Chair Powell Awaited Friday

• Higher US yields in the aftermath of the stronger-than-expected US PMI data have helped propel USDJPY (+0.70%) comfortably back above the 148.00 handle on Thursday, taking the pair to a fresh weekly high.
• Above here, firm resistance to watch is at 148.52, the Aug 12 high, of which a breach would be viewed as a short-term bullish signal. The August 01 high at 150.92 remains key resistance. In terms of support, the August 14 low at 146.21 is the first notable level.
• A more stable session for equities has helped AUD and NZD to relatively outperform on Thursday, placing greater pressure on the likes of EUR and GBP, which have slipped in line with the USD index adjustment.
• For EURUSD, this has translated into weekly printed lows at 1.16, and further pressure being placed on 50-day EMA support. The average now intersects at 1.1591, and a clear break would threaten the underlying bullish trend structure, signalling scope for a deeper retracement towards key support at 1.1392, the Aug 1 low.
• In similar vein, GBPUSD looks set to extend its losing streak to four consecutive sessions, narrowing the gap to the August 11 low at 1.3400. Today’s price action looks set to confirm a break of the 50-day EMA, confirming the likely potential for a technical reversal.
• Downside in EURNOK (-0.86%) has persisted through the afternoon, which sees the cross down 0.8% today and testing key support at the 50-day EMA of 11.8298. Clearance of this level would expose the July 30 low at 11.7460
• Japan National CPI data is scheduled Friday before the global focus turns to Fed Chair Powell’s speech at Jackson Hole. UK and Canada retail sales data are also scheduled.

FRIDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
22/08/2025	0600/0800	**	SE	Unemployment
22/08/2025	0600/0800	***	DE	GDP (f)
22/08/2025	0645/0845	**	FR	Manufacturing Sentiment
22/08/2025	0900/1100		EU	Q2 Negotiated Wage Growth
22/08/2025	1230/0830	**	CA	Retail Trade
22/08/2025	1230/0830	**	CA	Retail Trade
22/08/2025	1400/1000		US	Fed Chair Jerome Powell
22/08/2025	1400/1000	***	US	US Fed Chair Speech
22/08/2025	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly
22/08/2025	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly