MNI ASIA OPEN: Tsys Ratchet Off Lows, Powell No Risk Free Path
EXECUTIVE SUMMARY
- MNI BRIEF: Powell Comfortable With Financial Stability Risks
- MNI FED: Chicago's Goolsbee Eyes Neutral Rates 100-125bp Lower
- MNI FED: Powell Reiterates "There Is No Risk-Free Path", Policy Not On Preset Course
- MNI FED: Atlanta Fed Bostic's Longer-Run Dot Suggests Limited Impetus To Cut Further
- MNI US DATA: Flash PMIs Point To Moderation In Q3 Expansion
US
MNI BRIEF: Powell Comfortable With Financial Stability Risks
Federal Reserve Chair Jerome Powell said Tuesday banks remain well-capitalized and households in aggregate are in good shape financially, expressing little concern about financial stability risks as the central bank eases interest rates. "It's not a time of elevated elevated financial stability risks," Powell told the Greater Providence Chamber of Commerce in Providence, Rhode Island. The Fed chair noted that markets are "elevated relative to historical levels."
MNI FED: Powell Reiterates "There Is No Risk-Free Path", Policy Not On Preset Course
Fed Chair Powell's speech text on the Economic Outlook is available here. His comments don't appear to deviate much if at all from last week's FOMC press conference, hence a limited market reaction. "Two-sided risks mean that there is no risk-free path. If we ease too aggressively, we could leave the inflation job unfinished and need to reverse course later to fully restore 2 percent inflation. If we maintain restrictive policy too long, the labor market could soften unnecessarily. When our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate."
MNI FED: Atlanta Fed Bostic's Longer-Run Dot Suggests Limited Impetus To Cut Further
Atlanta Fed President Bostic added some reflections on the economy and rates in a podcast recording Tuesday morning. Recall that in an interview published in the Wall Street Journal Monday he confirmed he maintained his view for just 1 rate cut in 2025, which makes him among the 7 most hawkish members on the Committee in terms of 2025 rates, with 6 of 19 members writing in 4.1% end-year Fed funds in the Dot Plot.
MNI FED: Chicago's Goolsbee Eyes Neutral Rates 100-125bp Lower
Chicago Fed's Goolsbee (2025 voter) in a CNBC interview calls current policy "mildly restrictive" and points to a neutral rate 100-125bp lower than current rates. However he says that rates should come down at a "gradual" pace and with inflation stubbornly above target, the Fed needs to be "a little careful". In sum it wouldn't surprise us if his rate outlook was for another 2 cuts this year (in line with the median 3.6% dot submitted in September) and for another 2-3 cuts next year for a total 125-150bp of easing to 2.9 or 3.1% by end-2026 including the 25bp delivered last week.
MNI FED: Gov Bowman: Concerned Will Need Faster And Bigger Cuts
Gov Bowman's speech on "Views on the Economy and Monetary Policy" is here - she warns that bigger, faster cuts may be warranted with the possibility that the Fed has fallen behind the curve on weakening labor market conditions. She's definitely one of the 9 rate dots at 3.6% for end-2025, and we would guess she's one of the 5 who are either at 2.6% or 2.9% (3-4 additional cuts) in 2026, though she may have more to say in Q&A.
NEWS
MNI UN: Trump Calls For Immediate Hostage Release & NATO Stop Russia O&G Purchases
In his address to the United Nations, US President Donald Trump lambasts the organisation for "not being there for us" during peace negotiations. Says that the UN "has tremendous potential" but is "not coming close to living up" to this. Trump claims that the UN offers only "Empty words, and empty words don’t solve war."
MNI SECURITY: NATO Warns Russia On Aerial Incursions
NATO has released a statement following a meeting called earlier on 23 Sep at the behest of Estonia. This comes after a series of alleged Russian incursions into NATO airspace using drones, fighter jets, and reconnaissance aircraft. NATO says the 19 Sep incursion in Estonia's airspace "is part of a wider pattern of increasingly irresponsible Russian behaviour." NATO: "Russia bears full responsibility for these actions, which are escalatory, risk miscalculation and endanger lives. They must stop."
MNI DENMARK: PM Calls Airport Drone Incident "An Attack" Amid Ministerial Reshuffle
Prime Minister Mette Frederiksen has said that the drone incident at Copenhagen Airport on the night of 22 September was "an attack", saying they were the "most serious" incidents to affect critical infrastructure "to date". Speaking to reporters, Frederiksen said the incident, which also saw drones flying near Oslo Airport in Norway, resulting in the grounding of flights, must be seen in the light of other incidents affecting NATO member states in recent weeks. These include mass drone incursions in Poland and Romania, airspace incursions in Estonia, and cyberattacks on airports in the UK, Belgium, and Germany. The PM said she "cannot deny in any way that it was Russia" behind the incursion at Katsrup.
MNI JAPAN: LDP Candidates Support New Parties In Coalition, No Signal Of Which Ones
Speaking at a joint press conference earlier today, all five candidates for the presidency of the governing Liberal Democratic Party (LDP) voiced their support for the prospect of expanding the governing coalition beyond the LDP and its long-term partner, the centrist social-conservative Komeito party.
US TSYS
MNI US TSYS: Off Lows, Little New From Fed Chair Powell Outlook
- US Treasuries look to finish near late session highs after holding lower/narrow range for much of the session.
- Tsys gained slightly after flash PMIs come out slightly lower than expected: flash US PMIs brought a 2-month low for Manufacturing at 52.0 (52.2 consensus, 53.0 prior) and a 3-month low for Services at 53.9 (54.0 consensus, 54.5 prior), but both readings were pretty much in line with consensus and suggest an economy in expansionary territory.
- Fed speak elicited muted reactions: Atlanta Fed Bostic's longer-run dot suggests limited impetus to cut further, while Chicago Fed Goolsbee calls current policy "mildly restrictive" and points to a neutral rate 100-125bp lower than current rates.
- Even Chair Powell's outlook didn't deviate much if at all from last week's FOMC press conference as "two-sided risks mean that there is no risk-free path." Treasuries gained after around Chairman Powell speech as block buy over 10k TYZ5 added impetus to move.
- Little reaction in Tsy futures after the latest $69B 2Y note auction (91282CPB1) comes out on the screws: 3.571% high yield vs. 3.571% WI; 2.51x bid-to-cover vs. 2.69x prior.
- Light data again tomorrow: New Home Sales and Building Permits scheduled. SF Fed Daly economic outlook, moderated Q&A after the close. Main focus is on Thursday's heavy data drop: Personal Consumption, GDP, Durables/Cap Goods, and weekly claims.
OVERNIGHT DATA
MNI US DATA: Flash PMIs Point To Moderation In Q3 Expansion
September's flash US PMIs brought a 2-month low for Manufacturing at 52.0 (52.2 consensus, 53.0 prior) and a 3-month low for Services at 53.9 (54.0 consensus, 54.5 prior), but both readings were pretty much in line with consensus and suggest an economy in expansionary territory (consistent with 2.2% Q/Q annualized GDP expansion in Q3, per the S&P Global report).
MNI US DATA: Richmond Fed: Pickup In Activity Fails To Persist In September
The Richmond Fed's Fifth District surveys of regional manufacturing and services firms for September showed that a nascent pickup in activity in August may have been an outlier. The headline aggregate indices as well as key sub-components weakened, though were roughly in line with averages seen over the last year.
MNI US DATA: Philly Fed Services Activity And Prices Decidedly Mixed
The September Philadelphia Fed Nonmanufacturing Business Outlook Survey showed a modest pickup in regional services sector activity, albeit remaining soft overall with a weaker outlook. The regional level general activity index picked up to -12.3 from -17.5, however the firm-level reading pulled back significantly to 5.8 from 24.6 prior which had been a 41-month high (and now looks like an extreme outlier). The 6-month activity outlooks for both regional and firm-level activity reversed August's rise, falling to 4-month lows in the case of the regional reading.
MNI: US REDBOOK: SEP STORE SALES +6.2% V YR AGO MO
- US REDBOOK: SEP STORE SALES +6.2% V YR AGO MO
- US REDBOOK: STORE SALES +5.7% WK ENDED SEP 20 V YR AGO WK
MARKETS SNAPSHOT
Key market levels of markets in late NY trade:
DJIA down 89.51 points (-0.19%) at 46293.79
S&P E-Mini Future down 41.25 points (-0.61%) at 6711.75
Nasdaq down 212.3 points (-0.9%) at 22575.86
US 10-Yr yield is down 3.7 bps at 4.11%
US Dec 10-Yr futures are up 6.5/32 at 112-29
EURUSD up 0.0012 (0.1%) at 1.1815
USDJPY down 0.16 (-0.11%) at 147.57
Gold is up $19.37 (0.52%) at $3765.70
European bourses closing levels:
EuroStoxx 50 up 30.34 points (0.56%) at 5472.39
FTSE 100 down 3.36 points (-0.04%) at 9223.32
German DAX up 84.28 points (0.36%) at 23611.33
French CAC 40 up 41.91 points (0.54%) at 7872.02
US TREASURY FUTURES CLOSE
3M10Y -4.742, 15.178 (L: 15.178 / H: 21.17)
2Y10Y -1.975, 52.183 (L: 51.78 / H: 54.268)
2Y30Y -1.748, 113.996 (L: 113.59 / H: 116.481)
5Y30Y -0.295, 105.64 (L: 105.269 / H: 107.287)
Current futures levels:
Dec 2-Yr futures up 0.625/32 at 104-9 (L: 104-07.5 / H: 104-09.25)
Dec 5-Yr futures up 3/32 at 109-15.25 (L: 109-10.75 / H: 109-16)
Dec 10-Yr futures up 6.5/32 at 112-29 (L: 112-21.5 / H: 112-30)
Dec 30-Yr futures up 15/32 at 116-23 (L: 116-05 / H: 116-24)
Dec Ultra futures up 18/32 at 120-5 (L: 119-15 / H: 120-07)
MNI US 10YR FUTURE TECHS: (Z5) Remains Above Support At The 50-Day EMA
- RES 4: 114-12 1.0% 10-dma envelope
- RES 3: 114-10 High Apr 7 (cont.)
- RES 2: 114-00 Round number resistance
- RES 1: 113-12/29 High Sep 18 / High Sep 11 and the bull trigger
- PRICE: 112-29+ @ 1540 ET Sep 23
- SUP 1: 112-20+/112-15+ Low Sep 22 / High Aug 5 and 14
- SUP 2: 112-09 50-day EMA
- SUP 3: 111-13+ Low Aug 18 and a key support
- SUP 4: 110-25 Low Aug 1
The pullback in Treasury futures from their recent highs appear corrective. Price has moved through the 20-day EMA, at 112-28+. The break signals scope for a deeper retracement and attention turns to the 50-day EMA, at 112-08+ and the next key support. Moving average studies remain in a bull mode position, highlighting a dominant uptrend. The bull trigger has been defined at 113-29, the Sep 11 high.
SOFR FUTURES CLOSE
Current White pack (Dec 25-Sep 26):
Dec 25 +0.010 at 96.335
Mar 26 +0.010 at 96.545
Jun 26 +0.005 at 96.765
Sep 26 +0.010 at 96.910
Red Pack (Dec 26-Sep 27) +0.010 to +0.020
Green Pack (Dec 27-Sep 28) +0.025 to +0.030
Blue Pack (Dec 28-Sep 29) +0.030 to +0.035
Gold Pack (Dec 29-Sep 30) +0.035 to +0.040
REFERENCE RATES (PRIOR SESSION)
US TSYS: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 4.14% (+0.00), volume: $2.906T
- Broad General Collateral Rate (BGCR): 4.11% (+0.00), volume: $1.146T
- Tri-Party General Collateral Rate (TCR): 4.11% (+0.00), volume: $1.109T
- (rate, volume levels reflect prior session)
STIR: FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 4.09% (+0.01), volume: $93B
- Daily Overnight Bank Funding Rate: 4.09% (+0.01), volume: $195B
FED Reverse Repo Operation
RRP usage inches up to $14.402B with 16 counterparties this afternoon from $14.173B Monday. Compares to $11.363B on Friday, September 16 - lowest level since early April 2021. The year's high usage stands at $460.731B on June 30.
MNI PIPELINE: Corporate Bond Update: $4.5B Enel Finance 4Pt Launched
- Date $MM Issuer (Priced *, Launch #)
- 09/23 $5B #Lowes $650M 2Y +37, $750M 3Y +47, $1.1B +5Y +62, $1.3B 7Y +67, $1.2B 10Y +77
- 09/23 $4.5B #Enel Finance $1B 3Y +65, $1.25B 5Y +80, $1.25B 10Y +100, $1B 30Y +112
- 09/23 $1.5B #MuniFin 3Y SOFR+35
- 09/23 $1.2B #Gildan Activewear $600M each: 5Y +103, 10Y +130
- 09/23 $1B #Nationwide BS $700M 5Y +68, $300M 5Y SOFR+101
- 09/23 $500M #AfDB PerpNC10 5.875%
- 09/23 $500M #CK Hutchison 5Y +62.5
- 09/23 $Benchmark American Electric 30.5NC5.25 5.8%, 30.5NC10.25 6.05%
MNI BONDS: EGBs-GILTS CASH CLOSE: Gilts Outperform Bunds On PMI Data
Gilts outperformed Bunds Tuesday amid mixed European PMIs.
- September Flash PMI data was the scheduled highlight of the session, and it turned out to be the biggest market mover.
- Overall Eurozone composite PMIs were in-line with expectations. However a French PMI miss across both Services and Manufacturing with softer inflationary readthrough saw core FI boosted, after which more mixed German readings including a return to expansion for Services with more solid output prices saw Bunds retrace lower.
- The UK saw softer-than-expected PMI readings on both Manufacturing and Services, seeing Gilts move through Monday's strongest levels, albeit the report noted solid prices charged.
- A subsequent pickup in oil prices and equities had little impact, but in-line US PMIs later drove an uptick in global yields before they faded into the European close.
- The UK curve bull flattened, with Germany's twist flattening. Periphery/semi-core EGB spreads were mixed, with Italy and Spain slightly tighter to Bunds and Greece and France slightly wider.
- Wednesday's calendar includes German IFO data, with BOE's Greene speaking after the cash close.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is up 0.4bps at 2.022%, 5-Yr is up 0.8bps at 2.328%, 10-Yr is up 0.1bps at 2.749%, and 30-Yr is down 1.4bps at 3.343%.
- UK: The 2-Yr yield is down 2.6bps at 3.954%, 5-Yr is down 2.6bps at 4.104%, 10-Yr is down 3.2bps at 4.68%, and 30-Yr is down 5.1bps at 5.497%.
- Italian BTP spread down 0.3bps at 79.4bps / French OAT up 0.7bps at 81.7bps
MNI FOREX: NZD Tilts Lower, Overall Tight Ranges for G10 Pairs
- The USD index has oscillated around the unchanged mark on Tuesday, holding a relatively subdued range between 97.20-97.46. Fed Chair Powell broadly reiterated his remarks from last week’s FOMC press conference, providing little fresh impetus for the greenback.
- EURUSD has been consolidating close to the 1.18 mark following slightly weaker-than-expected French PMI data which was then offset by a stellar reading for the German services release. The trend for the pair remains bullish and the recent pullback is considered corrective. Support to watch is 1.1672. the 50-day EMA.
- The Riksbank provided a moderately dovish surprise, cutting the policy rate to 1.75%. However, the communication that rates should be held at the current level “for some time to come” and the positive session for European stock indices has left the Swedish Krona modestly higher on the day. EURSEK has traded back down to 11.00, while last week’s lows reside closer to 10.90. For USDSEK, cycle lows are around 1.4% from current levels at 9.1936.
- NZD (-0.1%) is a modest underperformer across G10, continuing the recent weakness seen in the aftermath of poor GDP figures last week. Additional uncertainty regarding the new RBNZ governor announcement may be providing an additional headwind. The sharp NZDUSD reversal from 0.6000 to current spot levels renews the focus on a significant pivot point at 0.5800, which coincides with the 50% retracement of the year’s range. Notably, AUDNZD printed a fresh cycle high at 1.1280, continuing the impressive performance for the cross in recent months.
- In emerging markets, the Brazilian real outperformed amid a seemingly more constructive tone between President’s Trump and Lula. Headlines suggest the two leaders will meet next week, bolstering hopes of a more cordial relationship between the two nations. USDBRL sold off to 5.28 on the developments, within close proximity of recent cycle lows.
- Australia August CPI, German IFO and US new home sales data are scheduled Wednesday.
WEDNESDAY DATA CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 24/09/2025 | 0600/1400 | ** |  CN | MNI China Money Market Index (MMI) |
| 24/09/2025 | 0700/0900 | ** |  SE | Economic Tendency Indicator |
| 24/09/2025 | 0700/0900 | ** |  ES | PPI |
| 24/09/2025 | 0800/1000 | *** |  DE | IFO Business Climate Index |
| 24/09/2025 | 0900/1000 | ** |  GB | Gilt Outright Auction Result |
| 24/09/2025 | 1100/0700 | ** |  US | MBA Weekly Applications Index |
| 24/09/2025 | 1300/1500 | ** |  BE | BNB Business Confidence |
| 24/09/2025 | 1400/1000 | *** | US | New Home Sales |
| 24/09/2025 | 1400/1000 | *** | US | New Home Sales |
| 24/09/2025 | 1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 24/09/2025 | 1430/1030 | ** | US | US DOE Petroleum Supply |
| 24/09/2025 | 1530/1130 | ** | US | US Treasury Auction Result for 2 Year Floating Rate Note |
| 24/09/2025 | 1630/1730 | GB | BOE Greene On Supply Shocks and MonPol | |
| 24/09/2025 | 1700/1300 | * | US | US Treasury Auction Result for 5 Year Note |
| 24/09/2025 | 2010/1610 | US | San Francisco Fed's Mary Daly | |
| 25/09/2025 | - |  CH | Swiss National Bank Meeting |
