MNI ASIA OPEN: Sen Warren: Release the Files, On Jobs That Is

EXECUTIVE SUMMARY

• MNI US DATA: Sen Warren: BLS Has Payrolls Data Ready, Should Release On Time
• MNI US: White House Says Federal Govt Layoffs During Shutdown 'Likely In Thousands'
• MNI US DATA: Chicago Fed Indicators Show Tick-Up In Unemployment Rate In Sept
• MNI US OUTLOOK/OPINION: ISM Services Set To Show Firmer Activity, Steady Prices
• MNI US DATA: Challenger Job Trends This Year Are Higher-Firing, Lower-Hiring

US

MNI US OUTLOOK/OPINION: ISM Services Set To Show Firmer Activity, Steady Prices

Bloomberg consensus for ISM Services (1000ET) eyes a small increase to 51.5 from 50.8 in a second monthly improvement after the 49.9 in May was its lowest since Jun 2024, with prices paid looking to remain elevated. Activity: The average z-score (5-year lookback) of regional Fed current activity indices rose for a 3rd consecutive month, and despite remaining negative is consistent with an ISM services reading between 50 and 55.

NEWS

MNI US DATA: Sen Warren: BLS Has Payrolls Data Ready, Should Release On Time

CNN cites Democratic Sen Elizabeth Warren in an exclusive reporting that "Employees furloughed at the BLS have told Warren’s office the September labor data has been collected and is likely ready to be released". Warren told CNN in a statement: “Let’s be clear: the jobs data scheduled to come out this Friday has undoubtedly been collected and the President must release it." “Without it, the Federal Reserve will not have the full picture it needs to make decisions this month about interest rates that will impact every family across the country.”"

MNI US: White House Says Federal Govt Layoffs During Shutdown 'Likely In Thousands'

White House Press Secretary Karoline Leavitt told reporters a short time ago that federal government layoffs during the government shutdown are “likely going to be in the thousands.” Leavitt says it is “unfortunately” something the Office of Management and Budget and White House are working on today. Adds that the discussions would not be taking place if Democrats voted in favour of the GOP’s funding measure. Leavitt told reporters yesterday that layoffs will happen in “two days, imminent, very soon.”

MNI US: Bessent Talks On Shutdown, Fed, China & Argentina

Treasury Secretary Scott Bessent has been speaking to CNBC on a number of issues. On the gov't shutdown, Bessent says that "We could see a hit to GDP" from the shutdown. Claims that federal layoffs are just a "talking point". On Senate minority leader Chuck Schumer (D-NY) objecting to a 'clean' continuing resolution, Bessent claims that Schumer backed the spending levels in the spring, "but now has flipped", and that his "change in position reflects his polling."

US TSYS

MNI US TSYS: Continue to Extend Highs Ahead No-Employment Data Friday

• US Treasuries hold narrow range in the second half after extend session highs into midday - no obvious headline or flow driver though US$ did scale back from midday highs (Bbg US$ index +1.39 at 1201.54 vs. 1204.58 high) while stocks finished stronger (SPX & Nasdaq making new record highs earlier).
• Currently, TYZ5 +3 at 112-30, 10Y yield -.0135 to 4.0846%. Initial firm resistance to watch is unchanged, at 113-00, the Sep 24 high. A break would be bullish with next levels to watch at: 113-12/29 (High Sep 18 / High Sep 11 and the bull trigger). Curves remain flatter: 2s10s -1.763 at 54.169, 5s30s -1.483 at 102.137.
• No weekly jobless claims or factory orders today due to the Govt shutdown - Challenger, Gray & Christmas, however, reported job cut announcements fell 25.8% Y/Y in September, less severe than consensus which had expected a 13.3% rise.
• Friday's September employment report from the BLS most likely will NOT be released tomorrow despite Sen Warren (Dem) telling CNN the "labor data has been collected and is likely ready to be released". "Let’s be clear," Warren added, "the jobs data scheduled to come out this Friday has undoubtedly been collected and the President must release it."
• Bloomberg consensus for ISM Services (1000ET) eyes a small increase to 51.5 from 50.8 in a second monthly improvement after the 49.9 in May was its lowest since Jun 2024, with prices paid looking to remain elevated.

OVERNIGHT DATA

Most of today's data will be delayed/suspended (no weekly/continuing jobless claims or factory orders data) due to the shutdown. MNI shutdown guide to US data releases: LINK

MNI US DATA: Challenger Job Trends This Year Are Higher-Firing, Lower-Hiring

Challenger, Gray & Christmas reports job cut announcements fell 25.8% Y/Y in September, less severe than consensus which had expected a 13.3% rise. But the broader report was suggestive of a labor market at its most low-hiring and high-firing for a first 9 months of the year since the pandemic and before that, the Global Financial Crisis, with hiring in September itself looking unusually weak ahead of the key holiday season for retailers. 

• It should first be acknowledged that public sector-related employment is the main driver of overall weakness: the government sector has announced 299,755 job cuts this year, all but about 10k of which were DOGE-impacted. (Similarly, the regional job cuts breakdown was heavily weighted to the East, the lion's share being reductions at federal agencies in Washington DC with cuts rising 759% to 298,901 from 34,788). A distant second sector-wise is Tech which has shed 107,878 jobs so far this year.

MNI US DATA: Chicago Fed Indicators Show Tick-Up In Unemployment Rate In Sept

The Chicago Fed's Final Labor Market Indicators report for September estimates a 4.34% unemployment rate for the month, which would be an uptick from the 4.32% unrounded in August (and also the Chicago Fed's Advance estimate). That would mark the highest unrounded unemployment rate since October 2021 (albeit in line with expectations for the September nonfarm payrolls report which will be postponed due to the federal government shutdown).

• The unemployment rate forecast includes a combination of job-finding and job  separations rates, based on real-time data. That data includes: initial and  continuing jobless claims, Google Trends unemployment topic index, Bloomberg  consensus for unemployment, Morning Consult's indices, JOLTS, the Conference  Board's labor market differential, and Indeed / ADP / Lightcast-based job  openings rates.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA up 104.45 points (0.22%) at 46545.79
S&P E-Mini Future up 7.25 points (0.11%) at 6769
Nasdaq up 109.9 points (0.5%) at 22864.89
US 10-Yr yield is down 1.4 bps at 4.0846%
US Dec 10-Yr futures are up 3/32 at 112-30
EURUSD down 0.0009 (-0.08%) at 1.1723
USDJPY up 0.09 (0.06%) at 147.15
WTI Crude Oil (front-month) down $1.22 (-1.97%) at $60.56
Gold is down $7.85 (-0.2%) at $3857.79

European bourses closing levels:
EuroStoxx 50 up 64.6 points (1.16%) at 5645.81
FTSE 100 down 18.7 points (-0.2%) at 9427.73
German DAX up 308.94 points (1.28%) at 24422.56
French CAC 40 up 89.68 points (1.13%) at 8056.63

US TREASURY FUTURES CLOSE

3M10Y -2.344, 13.499 (L: 13.048 / H: 18.324)
2Y10Y -1.763, 54.169 (L: 53.43 / H: 56.469)
2Y30Y -2.163, 114.908 (L: 112.945 / H: 117.725)
5Y30Y -1.58, 102.04 (L: 100.2 / H: 104.121)
Current futures levels:
Dec 2-Yr futures steady at at 104-9.875 (L: 104-08 / H: 104-10.75)
Dec 5-Yr futures up 0.5/32 at 109-14.5 (L: 109-09.75 / H: 109-16.25)
Dec 10-Yr futures up 3/32 at 112-30 (L: 112-21.5 / H: 112-31)
Dec 30-Yr futures up 11/32 at 117-10 (L: 116-23 / H: 117-13)
Dec Ultra futures up 13/32 at 120-25 (L: 120-03 / H: 120-30)

MNI US 10YR FUTURE TECHS: (Z5) Support At The 50-Day EMA Remains Intact

• 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: 113-00 High Sep 24
• PRICE:‌‌ 112-25 @ 1215 ET Oct 2
• SUP 1: 112-11/01 50-day EMA / 50.0% of Jul 15 - Sep 11 bull phase  
• 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  

Treasuries bounced Wednesday and the contract is holding on to its latest gains. Attention is on support at the 50-day EMA, currently at 112-11. A clear break of this average would undermine a bull theme and signal scope for a deeper retracement. This would open 111-13+, the Aug 18 low and the next key support. On the upside, initial firm resistance to watch is unchanged, at 113-00, the Sep 24 high. A break would be bullish.

SOFR FUTURES CLOSE

Current White pack (Dec 25-Sep 26):
Dec 25 steady00 at 96.355
Mar 26 +0.005 at 96.570
Jun 26 +0.005 at 96.785
Sep 26 +0.010 at 96.925
Red Pack (Dec 26-Sep 27) steady to +0.010
Green Pack (Dec 27-Sep 28) steady
Blue Pack (Dec 28-Sep 29) +0.005 to +0.005
Gold Pack (Dec 29-Sep 30) +0.010 to +0.020

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

• Secured Overnight Financing Rate (SOFR): 4.20% (-0.04), volume: $3.075T
• Broad General Collateral Rate (BGCR): 4.16% (-0.04), volume: $1.154T
• Tri-Party General Collateral Rate (TCR): 4.16% (-0.04), volume: $1.119T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.09% (+0.00), volume: $103B
• Daily Overnight Bank Funding Rate: 4.09% (+0.00), volume: $180B

FED Reverse Repo Operation

RRP usage continues to recede to the lowest level since early April 2021: $8.436B with 10 counterparties this afternoon, down from $10.179B Wednesday. Compares to the year's high usage of $460.731B on June 30.

MNI PIPELINE: Corporate Bond Update: $1.5B Kenya 2Pt Launched

• Date $MM Issuer (Priced *, Launch #)
• 10/02 $1.5B #Kenya $750M each: 7Y 8.2%, 12Y 9.2%
• 10/02 $800M *IFC 5Y SOFR+38
• 10/02 $500M #Deere Funding Canada WNG 5Y +50

MNI BONDS: EGBs-GILTS CASH CLOSE: Gilts Marginally Underperform Bunds

Bunds outperformed Gilts Thursday.

• After a flat start, yields started to descend in mid-morning London trade, with the implications of the US government shutdown still being digested.
• There was a sharp rise in yields in early afternoon however, with no discernable trigger (some cited US Treasury Secretary Bessent indicating an imminent "breakthrough" in relations with China).
• However the move faded as equities turned lower, leading core yields to close near their session lows (in the case of Bund) or in the middle of the daily range (Gilt).
• UK fiscal woes remained a background theme, with an FT report has reaffirmed existing estimates surrounding the fiscal "black hole"  (~GBP30bln).
• In data, the UK DMP survey has "got something for both the more dovish and more hawkish members", as MNI's Macro team wrote, so didn't change the BOE outlook. Also, Swiss CPI inflation printed unchanged and marginally below consensus at 0.2% Y/Y in September.
• The German curve bull flattened on the day, with Gilts bear steepening. Periphery/semi-core EGB spreads widened slightly.
• Friday's calendar includes final Services/Composite PMIs (the only reading, in Italy and Spain's case), along with French industrial production and Italian fiscal data. There are multiple central bank speakers scheduled including ECB's Lagarde and BOE's Bailey.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.3bps at 2.01%, 5-Yr is down 0.4bps at 2.297%, 10-Yr is down 1.4bps at 2.699%, and 30-Yr is down 2.4bps at 3.274%.
• UK: The 2-Yr yield is up 1.9bps at 3.984%, 5-Yr is up 2bps at 4.137%, 10-Yr is up 1.4bps at 4.71%, and 30-Yr is up 0.6bps at 5.517%.
• Italian BTP spread up 0.7bps at 82bps / French OAT up 0.5bps at 82.2bps

MNI FOREX: USD Rallies to End Losing Streak, Lack of Data Unlikely to Deter Fed

• After several sessions of losses, the USD clawed back lost ground into the Thursday close, snapping losses posted into the beginning of the US government shutdown. While weekly jobless claims data was another victim of the agency closures, markets looked to private sector proxies as a guide, with some alternative metrics pointing to a stronger labor market turnout in September than expected.
• Friday's NFP print will not go ahead, and while this leaves the Fed with fewer datapoints to aide their decision-making, it's not expected to deter the FOMC from a second rate cut at their October meeting. The USD rally into the close stood out for EUR, prompting EUR/USD to trade through to new weekly lows, with the move accelerating on the break of both 1.1712 and 1.1696 - both intraday retracements for the bounce of last week's lows.
• A break higher for USD/CAD into the European close also drew focus. The pair made light work of resistance into the late August highs at 1.3925 as well as last week's highs of 1.3959. Resultantly, spot traded to the best level since May to challenge the 200-dma of 1.3989. Clerance here would be a major bullish development and isolate 1.4016 as the bull trigger.
• Lastly for GBP/USD, weakness Thursday on the 15min candle chart shows the breakdown in GBP/USD has pressed price through the uptrendline drawn off the pullback low at 1.3324. The pullback has steadied into 1.3426 - a retracement level - but clearance here opens 1.3372-1.3402 intraday.
• Focus Friday shifts back to Europe, with key releases including final PMI prints across the continent as well as the industrial/manufacturing production prints in France. While there will be no BLS payrolls data, the ISM Services Index will still go ahead, and may raise extra market attention given the lack of official government releases. 

FRIDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
03/10/2025	0645/0845	*	FR	Industrial Production
03/10/2025	0700/0300	*	TR	Turkey CPI
03/10/2025	0715/0915	**	ES	S&P Global Services PMI (f)
03/10/2025	0715/0915	**	ES	S&P Global Composite PMI (final)
03/10/2025	0745/0945	**	IT	S&P Global Services PMI (f)
03/10/2025	0745/0945	**	IT	S&P Global Composite PMI (final)
03/10/2025	0750/0950	**	FR	S&P Global Services PMI (f)
03/10/2025	0750/0950	**	FR	S&P Global Composite PMI (final)
03/10/2025	0755/0955	**	DE	S&P Global Services PMI (f)
03/10/2025	0755/0955	**	DE	S&P Global Composite PMI (final)
03/10/2025	0800/1000	*	IT	Retail Sales
03/10/2025	0800/1000	**	EU	S&P Global Services PMI (f)
03/10/2025	0800/1000	**	EU	S&P Global Composite PMI (final)
03/10/2025	0830/0930	**	GB	S&P Global Services PMI (Final)
03/10/2025	0830/0930	***	GB	S&P Global/ CIPS UK Final Composite PMI
03/10/2025	0900/1100	**	EU	EZ PPI
03/10/2025	0940/1140		EU	ECB Lagarde Speech At Knot Farewell Symposium
03/10/2025	1000/0600		US	NY Fed's John Williams
03/10/2025	1230/0830	***	US	Employment Report
03/10/2025	1230/0830	***	US	Employment Report
03/10/2025	1230/0830	***	US	Employment Report
03/10/2025	1230/0830	***	US	Employment Report
03/10/2025	1230/0830	***	US	Employment Report
03/10/2025	1230/0830	***	US	Employment Report
03/10/2025	1320/1420		GB	BOE Bailey Keynote At Knot Farewell Symposium
03/10/2025	1345/0945	***	US	S&P Global Services Index (final)
03/10/2025	1345/0945	***	US	S&P Global US Final Composite PMI
03/10/2025	1350/1550		EU	ECB Schnabel In Panel At Knot Farewell Symposium
03/10/2025	1400/1000	***	US	ISM Non-Manufacturing Index
03/10/2025	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly
03/10/2025	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly
03/10/2025	1740/1340		US	Fed Vice Chair Philip Jefferson
03/10/2025	2200/1800		US	NY Fed's John Williams