MNI ASIA OPEN: Trump Warns Hamas, Unsure of Xi Meet in S Korea

EXECUTIVE SUMMARY

• MNI FED: Atlanta's Bostic: "No Time For Significant Shifts" In Policy
• MNI JAPAN: New Fin Min: Not Unnatural To Push For Abenomics v.2025
• MNI RUSSIA: Kremlin & Lavrov Push Back On CNN Trump-Putin Meeting Delay Report
• MNI US DATA: Redbook Retail Sales Still Solid Overall But Slow In Mid-October
• MNI US DATA: Philly Fed Non-Mfg Firms See First New Orders Drop Since June

US

MNI FED: Atlanta's Bostic: "No Time For Significant Shifts" In Policy

Atlanta Fed President Bostic largely reiterates previous commentary on current monetary policy (including at Monday's MNI event) in a speech in Frankfurt (link): "A period characterized by such widespread uncertainty is no time for significant shifts in monetary policy." "That is especially the case against the backdrop of a still resilient macroeconomy, which offers space for patience."

NEWS

MNI US: Trump On Aiming For $20 Trillion Of Investment

"TRUMP: GOING TO HAVE $20T IN INVESTMENTS IN US UNTIL YEAR END" - bbg

Context behind the headline: “I think we’re going to have $20tn of investment. We’re over $17tn right now. As an example, President Biden had less than a trillion for four years. We’re going to have $20tn in less than twelve months. It’s the largest amount in our country by far, by many times.” The White House tracker has $8.8tn of investment pledges but it's unclear how up to date that is. Having looked in the past, many of these pledges were over 4+ years.

MNI SECURITY: Trump On Hamas Via Truth Social

"Numerous of our NOW GREAT ALLIES in the Middle East, and areas surrounding the Middle East, have explicitly and strongly, with great enthusiasm, informed me that they would welcome the opportunity, at my request, to go into GAZA with a heavy force and “straighten our Hamas” if Hamas continues to act badly, in violation of their agreement with us...

MNI JAPAN: New Fin Min: Not Unnatural To Push For Abenomics v.2025

Newly-appointed Finance Minister Satsuki Katayama has been speaking to the press. Says that she is committed to cooperation on tax within the governing coalition. The libertarian-federalist Japan Innovation Party (Ishin), which sits alongside PM-designate Sanae Takaichi's conservative Liberal Democratic Party (LDP) in gov't, laid out the elimination of sales tax on food for two years as one of its key demands to support Takaichi's gov't. 

MNI RUSSIA: Kremlin & Lavrov Push Back On CNN Trump-Putin Meeting Delay Report

Reuters reporting comments from Kremlin spox Dmitry Peskov. Regarding the as-yet-undefined summit between Presidents Vladimir Putin and Donald Trump in Budapest, Peskov says neither leader has yet named exact dates, claiming that the meeting has not been postponed as "you cannot postpone what was not scheduled." Comes in response to a CNN article claiming US Secretary of State Marco Rubio "is not likely to recommend the Putin-Trump meeting move forward next week". 

US TSYS

MNI US TSYS: Tsys Hold Near Highs, New Record High for DJIA, Gold Record Decline

• Treasuries holding narrow, higher range since gaining early Tuesday - apparently sensitive to a couple social media posts by Pres Trump while stocks dipped too after he posted retribution on Hamas if they continue "to act badly, in violation of their agreement with us."
• Second half risk-off coincided with Pres Trump expecting "$20T in US until year end", while Trump anticipates having "a good deal with Xi"  the meeting in S Korea at end of the month may NOT happen.
• Currently, the Dec'25 10Y contract trades +5.5 at 113-24.5 vs 113-27.5 high. Moving average studies are in a bull-mode position and this set-up continues to highlight a dominant uptrend. Sights are on 114-10, the Apr 7 high (cont) and the next key resistance. Firm support lies at 113-01+, the 20-day EMA.
• Projected rate cut pricing steady to mildly mixed vs. late Monday levels (*): Oct'25 at -24.2bp (-24.7bp), Dec'25 at -49.2bp (-50bp), Jan'26 at -64.2bp (-63.7bp), Mar'26 at -78.2bp (-77bp).
• Stocks remain mixed late Tuesday, the DJIA outperforming after managing to mark a new record high of 47,125.66 in the first half. Reporting earnings after the close: Netflix, Capital One Financial, Mattel, Western Alliance Bancorp (in the hot seat last week after announcing bad loan losses), Omnicom, EQY and Texas Instruments.
• Precious metals sold off sharply on Tuesday, with spot gold currently down by 5.6% at $4,113/oz and silver down by 7.7% at $48.4/oz, albeit off session lows. Platinum and palladium have also fallen by 5-6%.

OVERNIGHT DATA

MNI US DATA: Redbook Retail Sales Still Solid Overall But Slow In Mid-October

Retail sales growth slowed in the week ending Oct 18 per the Johnson Redbook Retail Sales Index, which rose 5.0% Y/Y vs 5.9% prior. Overall month-to-date sales remained fairly robust, rising 5.4% Y/Y (ve retailers' targeted gain of 5.6%). That said, the 5.9% monthly pace suggested by early October sales looks less likely to materialize, with some suggestion that retail activity will slow from August and September's 6.1% pace in the Redbook Index (at least in nominal terms).

MNI US DATA: Philly Fed Non-Mfg Firms See First New Orders Drop Since June

Non-manufacturing firms in the Philadelphia Fed district echoed their manufacturing counterparts with a decline in activity in October. That is however when looking at what firms expect for their region whereas firm-level activity held up better, although the volatile new orders index did swing lower with its first negative reading since June.  The Philly Fed non-manufacturing business outlook survey fell 10pts to -22.2 in October, its weakest since June and a twelfth consecutive negative reading.

MNI CANADA DATA: Core CPI Latest Trends: Hotter Than Expected

Measures of core inflation were stronger than expected in September across the board. Of particular note was the rise in the median/trim average measure, at a 5-month high 3.15% Y/Y in September vs median expectations of a decline to 3.0%. Note also that August's median reading was revised up to 3.2% from 3.1%, bringing up August's trim/median avg to 3.10% from a previously estimated 3.05%.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA up 279.34 points (0.6%) at 46985.1
S&P E-Mini Future up 7.25 points (0.11%) at 6781
Nasdaq down 14.3 points (-0.1%) at 22974.36
US 10-Yr yield is down 2.5 bps at 3.9551%
US Dec 10-Yr futures are up 6/32 at 113-25
EURUSD down 0.0037 (-0.32%) at 1.1606
USDJPY up 1.16 (0.77%) at 151.91
WTI Crude Oil (front-month) up $0.3 (0.52%) at $57.82
Gold is down $251.77 (-5.78%) at $4103.80

European bourses closing levels:
EuroStoxx 50 up 5.9 points (0.1%) at 5686.83
FTSE 100 up 23.42 points (0.25%) at 9426.99
German DAX up 71.23 points (0.29%) at 24330.03
French CAC 40 up 52.79 points (0.64%) at 8258.86

US TREASURY FUTURES CLOSE

3M10Y -2.223, 7.227 (L: 6.014 / H: 9.632)
2Y10Y -2.062, 50.212 (L: 49.773 / H: 52.049)
2Y30Y -2.304, 108.892 (L: 107.981 / H: 111.225)
5Y30Y -0.993, 98.506 (L: 98.051 / H: 99.913)
Current futures levels:
Dec 2-Yr futures up 0.625/32 at 104-14.625 (L: 104-13.375 / H: 104-15.375)
Dec 5-Yr futures up 3/32 at 109-29.75 (L: 109-25.5 / H: 109-31.5)
Dec 10-Yr futures up 6/32 at 113-25 (L: 113-17 / H: 113-27.5)
Dec 30-Yr futures up 15/32 at 119-8 (L: 118-25 / H: 119-15)
Dec Ultra futures up 22/32 at 123-27 (L: 123-06 / H: 124-03)

MNI US 10YR FUTURE TECHS: (Z5) Trend Signals Remain Bullish

• RES 4: 115-00+ High Oct 1 ‘24 (cont)
• RES 3: 114-21+ 1.00 proi of the Aug 18 - Sep 11 - 25 price swing
• RES 2: 114-10   High Apr 7 (cont) and a key resistance
• RES 1: 114-02   High Oct 17
• PRICE:‌‌ 113-21+ @ 10:56 BST Oct 21
• SUP 1: 113-01+ 20-day EMA
• SUP 2: 112-30   Low Oct 13
• SUP 3: 112-21   50-day EMA
• SUP 4: 112-06   Low Sep 25 and a reversal trigger

A bull cycle in Treasuries remains intact. Last week’s rally resulted in a breach of key resistance at 113-29, the Sep 11 high. This confirms a resumption of the medium-term uptrend. Moving average studies are in a bull-mode position and this set-up continues to highlight a dominant uptrend. Sights are on 114-10, the Apr 7 high (cont) and the next key resistance. Firm support lies at 113-01+, the 20-day EMA.

SOFR FUTURES CLOSE

Current White pack (Dec 25-Sep 26):
Dec 25 -0.005 at 96.375
Mar 26 steady00 at 96.640
Jun 26 steady00 at 96.870
Sep 26 +0.010 at 97.020
Red Pack (Dec 26-Sep 27) +0.015 to +0.025
Green Pack (Dec 27-Sep 28) +0.030 to +0.030
Blue Pack (Dec 28-Sep 29) +0.025 to +0.035
Gold Pack (Dec 29-Sep 30) +0.030 to +0.040

REFERENCE RATES
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US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 4.16% (-0.02), volume: $2.945T
• Broad General Collateral Rate (BGCR): 4.12% (-0.04), volume: $1.164T
• Tri-Party General Collateral Rate (TCR): 4.12% (-0.04), volume: $1.135T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.11% (+0.00), volume: $82B
• Daily Overnight Bank Funding Rate: 4.11% (+0.00), volume: $163B

FED Reverse Repo Operation

RRP usage recedes to $4.699B with 10 counterparties this afternoon from $5.931B Monday. Compares to $3,516B on Tuesday, Oct 13 (lowest level since early April 2021) & this year's high usage of $460.731B on June 30.

MNI PIPELINE: Corporate Bond Update: Alberta Expected Wednesday

• Date $MM Issuer (Priced *, Launch #)
• 10/21 $5B *World Bank 5Y SOFR+38
• 10/21 $2B *Kingdom of Sweden 3Y SOFR+26
• 10/21 $1.5B Albertsons 5.5NC2 5.625%a, 8.5NC3 5.875%a
• 10/21 $800M #ASB Bank $500M 5Y +60, $300M 5Y SOFR+90
• 10/21 $Benchmark Kazakhstan 5Y +90a, book over $3.5B
• 10/21 $Benchmark Oman Electricity 5Y Sukuk investment calls
• Rolled to Wednesday:
• 10/22 $Benchmark Alberta 10Y SOFR+85a

MNI BONDS: EGBs-GILTS CASH CLOSE: Light Bull Flattening Ahead Of UK CPI

European long-end yields fell slightly Tuesday, with UK CPI data looming.

• The highlight of the session was the release of UK September public finance data which showed a slightly lower-than-expected public sector net borrowing figure plus downward revision to August.
• That saw the UK yield curve bull flatten, mirrored across EGBs, and accelerating in mid-afternoon after US President Trump said on social media that there was a possibility of allies potentially "going into Gaza with a heavy force".
• The German curve bull flattened, with the UK's twist flattening.
• Periphery/semi-core EGB spreads closed slightly wider.
• Wednesday's scheduled highlight is the UK inflation data release - MNI's preview is here. As we note in the preview, despite some BOE MPC members appearing to have more entrenched views, we think that this data release will have huge importance for the prospects for a Q4 cut. 

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is unchanged at 1.908%, 5-Yr is down 1.3bps at 2.155%, 10-Yr is down 2.5bps at 2.552%, and 30-Yr is down 3.6bps at 3.128%.
• UK: The 2-Yr yield is up 0.4bps at 3.858%, 5-Yr is down 0.9bps at 3.944%, 10-Yr is down 2.7bps at 4.478%, and 30-Yr is down 4.3bps at 5.266%.
• Italian BTP spread up 0.3bps at 79.2bps / French OAT up 0.7bps at 79.2bps

MNI FOREX: Gold Unwind Assists Greenback Outperformance, JPY Notably Weaker

• Tuesday’s session was categorised by a sharp selloff for precious metals, with the significant 6% unwind for spot gold providing a bid for the greenback against G10 peers. As such, the USD index has risen 0.3% on the session, to extend the bounce from Friday’s lows to just shy of 1%.
• The Japanese yen has been hardest hit in the G10 space, as markets focussed on Japan’s parliament confirming Sanae Takaichi as the new PM, and details emerged surrounding her new cabinet and her imminent plans to compile a new stimulus package. Furthermore, with Satsuki Katayama taking the finance minister role, expectations for a fiscal phase prioritising an Abenomics-like policy set have been reinforced.
• USDJPY rose from overnight lows of 150.47 to reach a session high of 152.17, with the recovery from last Friday’s low in USDJPY is beginning to highlight a stronger bullish signal. The pair fell from its best levels as PM Takaichi said there is "no immediate plan to revise the gov't-BoJ joint agreement on economic policy.
• Elsewhere, the Canadian dollar has outperformed following an above expectation set of inflation data. For USDCAD, the move lower narrows the gap to initial support at the 20-day EMA, which lies at 1.3972. However, it is worth highlighting that moving average studies are in a bull-mode position, highlighting a dominant uptrend.
• Initial weakness for EURCHF saw the cross trade within 4 pips of significant medium-term support at 0.9206. A break of this level would place EURCHF at the lowest level since the peg removal in 2015, and may garner attention as the inaugural SNB minutes are released this Thursday.
• In emerging markets, the dollar/gold dynamic has weighed significantly on the South African Rand, standing out among the EM FX basket. Despite the 1% USDZAR rally, spot remains shy of last Thursday’s highs, located at 17.4857, while bearish trend conditions do remain intact overall. A clear break of the 50-day EMA (at 17.44) would signal a potential reversal and open 17.8190, the Sep 4 high.

WEDNESDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
22/10/2025	0600/0700	***	GB	Consumer inflation report
22/10/2025	0600/0700	***	GB	Producer Prices
22/10/2025	1100/0700	**	US	MBA Weekly Applications Index
22/10/2025	1100/1300		EU	ECB de Guindos at Barcelona Real Assets Meeting
22/10/2025	1225/1425		EU	ECB Lagarde Keynote at Frankfurt Finance & Future Summit
22/10/2025	1430/1030	**	US	DOE Weekly Crude Oil Stocks
22/10/2025	1430/1030	**	US	US DOE Petroleum Supply
22/10/2025	1700/1300	**	US	US Treasury Auction Result for 20 Year Bond
22/10/2025	2000/1600		US	Fed Governor Michael Barr