MNI ASIA OPEN: Tsys Off Lows, Mixed Data Ahead Weekly Claims

EXECUTIVE SUMMARY

• MNI BRIEF: ADP Jobs Losses Strengthen Case For Fed Cut
• MNI FED: FT Echoes Fox’s Gasparino On Wall Street Warnings Of Hassett As Fed Chair
• MNI US DATA: No Real Surprises For ADP As Confirms Return Of Declining Employment
• MNI US DATA: Services PMI Revised Lower But Still Solid In Final November Release
• MNI US DATA: ISM Services Beat Countered By Declines In Some Key Components

US

MNI BRIEF: ADP Jobs Losses Strengthen Case For Fed Cut

U.S. private employers cut 32,000 jobs in November, well below expectations for a gain of just 10K, according to new data from ADP Wednesday that bolsters the prospect of another Federal Reserve interest rate cut next week. 

• Hiring was especially soft in professional and business services, information, manufacturing, and construction, according to the report, which has grown in importance for Fed policymakers in the absence of official government data in the wake of the shutdown. Small businesses led the decline, losing 120,000 jobs in November, while midsized and large firms gained 90,000 jobs. Wages for job-stayers grew 4.4% while those for job changers rose 6.3%.

NEWS

MNI US: Wall Street Cautions Trump Against Hassett As Fed Chair - Gasparino

Charles Gasparino at Fox Business reports on X that there is a 'last-ditch' effort by Wall Street and corporate America insiders to caution President Donald Trump against nominating National Economic Council Director Kevin Hassett as Federal Reserve Chair. 

• According to Gasparino, "They’re saying that his appointment sets the stage for higher long term interest rates because 1) The Fed will be a disorganized mess with leader lacking credibility inside 2) If Hassett manages to cut short term rates (as Trump wants) with divided vote because of sticky inflationary pressures, it will be perceived as political and inflationary." Figure 1: Who will Trump Nominate as Fed Chair Source: Polymarket

MNI FED: FT Echoes Fox’s Gasparino On Wall Street Warnings Of Hassett As Fed Chair

The FT has run a report saying bond investors warned US Treasury over picking Kevin Hassett as Fed chair in November. See the FT report in full, here: https://www.ft.com/content/ad4bfd8b-a0f8-4f9e-a234-eed589e3d0ab

• Two short excerpts: "Bond investors have told the US Treasury they are concerned about Kevin Hassett’s potential appointment as Federal Reserve chair, worrying he will cut interest rates aggressively to please President Donald Trump.
• The Treasury department solicited feedback on Hassett and other candidates in one-on-one conversations with executives at major Wall Street banks, asset management giants and other big players in the US debt market, according to several people familiar with the conversations."

MNI TARIFFS: Public Hearings On USMCA Trade Agreement Get Underway Today

Two days of public hearings on the United States-Canada-Mexico trade agreement (USMCA) get underway today at USTR, ahead of a mandatory review of the agreement on July 1 next year. A full list of witnesses here. The Globe and Mail reports that NY-based Canadian lawyer, Barry Appleton, said Canada needs to be prepared for the risk that the US announces its withdrawal from the USMCA as a negotiating tactic. Appleton told Bloomberg, “Simply hinting that he could [withdraw], would put the Canadians in an incredibly difficult negotiating position.”

US TSYS

MNI US TSYS: Tsys Grind Off Midmorning Lows, Mixed Data Ahead Thursday Weekly Claims

• Treasuries look to finish moderately firmer Wednesday - off early morning highs following a flurry of economic data.
• TYH6 currently +7.5 at 113-04 vs. 113-07 high, initial technical resistance at 113-11/22+ High Dec 1 / High Nov 25.
• The ISM services index was stronger than expected in November as it inched higher to 52.6 (cons 52.0) after 52.4 in October, marking its highest since February. The S&P Global US services PMI continues to offer a more optimistic assessment of current activity despite being revised down in its final November release to 54.1.
• ADP employment growth “surprised” lower at -32k (Bloomberg cons 10k) in November whilst the October increase was revised up from 42k to 47k.
• The S&P Global US services PMI was revised lower in the final November release 54.1 (flash & cons 55.0) in Nov final after 54.8 in Oct, dipping to its lowest since June rather than confirming what had been its highest since July.
• Stocks continue to plow higher Wednesday, recovering from early session lows after Microsoft denied a write-up from "The Information" they had lowered "AI software sales quotas". Pretty specific, nevertheless, while market concerns over stretched AI-tied valuations are on full display.
• Charles Gasparino at Fox Business reports on X that there is a 'last-ditch' effort by Wall Street and corporate America insiders to caution President Donald Trump against nominating National Economic Council Director Kevin Hassett as Federal Reserve Chair.
• Look Ahead Thursday Data Calendar: Challenger Job Cuts, Weekly Claims, Revelio & Regional Fed Data.

OVERNIGHT DATA

MNI US DATA: No Real Surprises For ADP As Confirms Return Of Declining Employment

The monthly ADP report in November turned out closer to the weakness implied by its own weekly tracker than Bloomberg consensus which had surprisingly eyed a small increase on the month. It confirms a return to a monthly decline in private employment, with a third decline in the past four months. ADP employment growth “surprised” lower at -32k (Bloomberg cons 10k) in November whilst the October increase was revised up from 42k to 47k.

MNI US DATA: ISM Services Beat Countered By Declines In Some Key Components

The ISM services report was stronger than expected in November although saw some conflicting developments in the main components, with new orders and prices paid slipping but employment increasing to a six-month high (albeit still in contractionary territory).  

• The ISM services index was stronger than expected in November as it inched higher to 52.6 (cons 52.0) after 52.4 in October, marking its highest since February. The S&P Global US services PMI continues to offer a more optimistic assessment of current activity despite being revised down in its final November release to 54.1. That said, the 1.5pt outperformance is the smallest gap since the ISM survey briefly overshot it in April.  

MNI US DATA: Services PMI Revised Lower But Still Solid In Final November Release

The S&P Global US services PMI was revised lower in the final November release, dipping to its lowest since June rather than confirming what had been its highest since July. Along with this downward revision, input cost inflation was also trimmed from the highest since Jan 2023 in the flash to today’s six-month high, but as you can see in the chart below that's a close call having still seen a solid acceleration in November. S&P Global US PMI press release opening highlights (release in full, here) 

• US Services PMI: 54.1 (flash & cons 55.0) in Nov final after 54.8 in Oct
• US Composite PMI: 54.2 (flash 54.8) in Nov final after 54.6 in Oct

MNI US DATA: Ex-Oil Import Price Inflation Returns To More Typical Pace In Q3

Headline import price inflation was softer than expected in September but our preferred ex-petroleum metric was on balance stronger and showed a return of continuation of more typical increases in Q3 after tariff-driven concessions in 1H25. Import prices inflation was softer than expected at 0.0% M/M (cons 0.1) in the shutdown-delayed September report. It also saw a downward revised 0.1% M/M in Aug vs an initial 0.3% but this was offset by upward revisions to Jul and Jun.

MNI US DATA: New Purchase Mortgage Applications See Fresh High Since Early 2023

New purchase mortgage applications extended their recent push higher in contrast to a further rolling over in refi activity, offering scope that recent cautious optimism for existing home sales might have continued in the near-term. MBA composite applications fell -1.4% (sa) last week after 0.2%, essentially two weeks of little change for the volatile series, but new purchases again outperformed refis in another update where the details are more interesting than the headline suggests.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA up 461.73 points (0.97%) at 47936.4
S&P E-Mini Future up 26.75 points (0.39%) at 6866.75
Nasdaq up 72.8 points (0.3%) at 23485.7
US 10-Yr yield is down 2.9 bps at 4.0575%
US Mar 10-Yr futures are up 7.5/32 at 113-4
EURUSD up 0.0044 (0.38%) at 1.1669
USDJPY down 0.69 (-0.44%) at 155.19
WTI Crude Oil (front-month) up $0.36 (0.61%) at $59.00
Gold is up $3.81 (0.09%) at $4209.56

European bourses closing levels:
EuroStoxx 50 up 8.39 points (0.15%) at 5694.56
FTSE 100 down 9.73 points (-0.1%) at 9692.07
German DAX down 17.15 points (-0.07%) at 23693.71
French CAC 40 up 12.81 points (0.16%) at 8087.42

US TREASURY FUTURES CLOSE

Curve update:
3M10Y +1.272, 33.526 (L: 28.368 / H: 34.682)
2Y10Y -0.243, 57.198 (L: 56.595 / H: 58.502)
2Y30Y +0.766, 124.13 (L: 123.025 / H: 125.222)
5Y30Y +1.396, 110.263 (L: 108.837 / H: 111.078)
Current futures levels:
Mar 2-Yr futures up 1.75/32 at 104-13.625 (L: 104-11.875 / H: 104-14.75)
Mar 5-Yr futures up 4.75/32 at 109-20.75 (L: 109-15.75 / H: 109-23)
Mar 10-Yr futures up 7.5/32 at 113-4 (L: 112-28 / H: 113-07)
Mar 30-Yr futures up 10/32 at 116-21 (L: 116-07 / H: 116-28)
Mar Ultra futures up 7/32 at 119-28 (L: 119-14 / H: 120-04)

MNI US 10YR FUTURE TECHS: (H6) Maintains A Softer Tone

• RES 4: 114-00   Round number resistance
• RES 3: 113-29+ High Oct 17 and a key resistance
• RES 2: 113-23   High Oct 23
• RES 1: 113-11/22+ High Dec 1 / High Nov 25
• PRICE:‌‌ 112-31 @ 10:57 GMT Dec 3
• SUP 1: 112-22   Low Dec 02
• SUP 2: 112-10+ Low Nov 20
• SUP 3: 112-07   Low Nov 5 and a key support
• SUP 4: 112-02+ Low Sep 25  

Treasuries maintain a softer tone following the sharp sell-off on Monday. Price has pierced support around the 50-day EMA, at 112-27. A clear breach of this average would undermine a recent bull theme and signal scope for a deeper retracement. This would open 112-07, the Nov 5 high and a bear trigger. A reversal higher is required to once again refocus attention on the key resistance and bull trigger at 113-29+, the Oct 17 high.

SOFR FUTURES CLOSE

Current White pack (Dec 25-Sep 26):
Dec 25 +0.008 at 96.278
Mar 26 +0.025 at 96.470
Jun 26 +0.025 at 96.705
Sep 26 +0.025 at 96.870
Red Pack (Dec 26-Sep 27) +0.025 to +0.030
Green Pack (Dec 27-Sep 28) +0.030 to +0.035
Blue Pack (Dec 28-Sep 29) +0.035 to +0.040
Gold Pack (Dec 29-Sep 30) +0.035 to +0.040

REFERENCE RATES
​​​​​​​
US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 4.01% (-0.11), volume: $3.407T
• Broad General Collateral Rate (BGCR): 3.96% (-0.11), volume: $1.310T
• Tri-Party General Collateral Rate (TCR): 3.96% (-0.11), volume: $1.276T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 3.89% (+0.00), volume: $91B
• Daily Overnight Bank Funding Rate: 3.89% (+0.00), volume: $160B

FED Reverse Repo Operation

RRP usage retreats to $2.514B while counterparties surge to 40 this afternoon from $5.620B Tuesday. Compares to last Tuesday November 18: $0.905B - lowest level since mid-March 2021; this years highest excess liquidity measure: $460.731B on June 30.

MNI PIPELINE: Corporate Bond Update: $2.5B Citigroup PerpNC5 Launched

• Date $MM Issuer (Priced *, Launch #)
• 12/03 $2.5B #Citigroup PerpNC5 6.625%
• 12/03 $1B #Deutsche Bank 6NC5 +85
• 12/03 $850M #Avalon Holdings 5Y +115
• 12/03 $500M *Protective Life +3Y +65
• 12/03 $500M Freedom Mortgage 5.5NC2.5
• 12/03 $500M #Western-Southern Global 7Y +90
• 12/03 $500M Standard Building Solutions 8.253.25 6%

MNI EUROPEAN INFLATION: MNI Eurozone Inflation Insight – Nov 2025

MNI Eurozone Inflation Insight, offering MNI analysis across a range of Eurozone-wide and country-level inflation metrics for the flash November release. You can find the full report here.  

• HICP inflation was as originally expected but marginally above where consensus likely stood following most country-level data in the flash November release. Core HICP was in line with expectations.  
• Energy was the main mover and surprise, coming in 0.3pp above expectations.
• The full November release on Dec 17 will provide a more useful update on exact drivers. That especially applies to services inflation, where it is not yet clear to what extent firm October airfares may have unwound.
• By country, Germany and Spain were stronger than expected, while France, Italy and the Netherlands saw downside misses.
• The ECB is still seen as being highly unlikely to cut at its Dec 18 meeting (<1bp priced), where new projections will be watched to judge whether a very mild easing bias (6bp of cuts by mid-2026) is warranted.

MNI FOREX: Dollar Index Breaks to 5-Week Lows, GBPUSD Surges Over 1%

• Broad dollar weakness has been notably extended Wednesday, prompting the DXY to print fresh pullback lows below 99.00, reaching a five-week low at 98.83. This extends the two-week selloff to around 1.55%, with the index previously stalling at touted 100.48 resistance in November.
• Greenback weakness continues to be a reflection of a more dovish profile for the Fed under potential Kevin Hassett leadership and an associated more optimistic risk backdrop. Weaker-than-expected ADP jobs data from the US and a softer headline ISM services PMI work in favour of the short-term narrative playing out.
• The USD index looks set to post a significant technical close, with the first daily close below the 50-day exponential moving average since early October. This impulse is generating several bullish signals across the rest of the G10 basket, and continues to bolster the optimistic sentiment for EM FX.
• GBP is a notable outperformer, assisted by a set of stronger PMI data this morning. The 1.05% rally for cable today may have been assisted by positioning dynamics as pre-budget positioning is squeezed further. Spot has narrowed the gap substantially to 1.3368, a Fibonacci retracement. Above here, 1.3416 is the next notable resistance, the Oct 21 high.
  • The significance of the break below the 50-day EMA in EURGBP at 0.8755 also stands out. The cross is now on course for a close below the late November lows and the lowest level since October 28th.
• Elsewhere, AUDUSD has now printed eight consecutive sessions of higher highs, keeping a bullish theme firmly intact, while it is worth reiterating that a primary driver of AUD strength is the continued pullback in front-end vols. Price action narrows the gap to the Oct 29 high at 0.6618, which is a key near-term resistance. In similar vein, NZD continues its post-RBNZ recovery, with today’s 0.7% gains edging spot closer to the medium-term pivot at 0.5800.
• Both EUR, JPY and CHF are slightly underperforming G10 peers and the adjustment of the DXY, however, EURUSD looks set to close above a key resistance of 1.1656, a strong reversal signal.

THURSDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
04/12/2025	0700/0800	***	SE	Flash Inflation Report
04/12/2025	0700/0800	***	SE	Flash Inflation Report
04/12/2025	0800/0900	**	CH	Unemployment
04/12/2025	0830/0930	**	EU	S&P Global Final Eurozone Construction PMI
04/12/2025	0930/0930		GB	BOE Decision Maker Panel Data
04/12/2025	0930/0930	**	GB	S&P Global/CIPS Construction PMI
04/12/2025	1000/1100	**	EU	EZ Retail Sales
04/12/2025	1245/1245		GB	BOE Mann Panel at European and Global Issues Conference
04/12/2025	1300/1400		EU	ECB Cipollone Chairs Panel on Fiscal Policy
04/12/2025	1330/0830	***	US	Jobless Claims
04/12/2025	1330/0830	**	US	WASDE Weekly Import/Export
04/12/2025	1500/1000	*	CA	Ivey PMI
04/12/2025	1500/1600		EU	ECB Lane at Fiscal Policy Conference
04/12/2025	1530/1030	**	US	Natural Gas Stocks
04/12/2025	1630/1130	**	US	US Bill 04 Week Treasury Auction Result
04/12/2025	1630/1130	*	US	US Bill 08 Week Treasury Auction Result
04/12/2025	1700/1200		US	Fed Vice Chair Michelle Bowman
04/12/2025	1800/1900		EU	ECB de Guindos Speech at Business Innovation Awards
05/12/2025	2330/0830	**	JP	Household spending