MNI ASIA OPEN: Will the Real Fed Chair Pick Please Stand Up!

EXECUTIVE SUMMARY

• MNI FED: Trump Explicitly Refers To Hassett As Potential Fed Chair
• MNI SECURITY: Putin Meeting With Witkoff/Kushner Underway In Moscow
• MNI US DATA: Job Switchers Wage Growth Premium Highest Since Jan 2024
• MNI US DATA: Redbook Retail Sales Point To Firmer Census Bureau Measure

US

MNI FED: Trump Explicitly Refers To Hassett As Potential Fed Chair

• Speaking at an announcement on the Trump Accounts, President Trump says, when listing off people in the room: "I guess a potential Fed chair is here too. I don’t know, are we allowed to say that, potential? He’s a respected person that I can tell you. Thank you, Kevin."
• It’s seen a renewed increase in odds that NEC's Kevin Hassett is picked as next Fed chair, currently at 85% on Polymarket having dropped to 65% a few hours earlier on Trump saying he will make an announcement probably in early next year. He had started the day at 80%.
• The early next year headline had caused a hawkish reaction in rates markets along with a flattening in the Treasury curve as it implied a delay to a previous timeline that was generally expected to come before Christmas and with Trump saying he had made his mind up on Sunday.
• There’s little reaction in rates markets this time though, having already pared the earlier intraday losses. 

NEWS

MNI UKRAINE: Zelenskyy-Hoping For Contact w/US As Soon As Kremlin Meeting Ends

Speaking in the Irish capital, Dublin, Ukrainian President Volodymyr Zelenskyy claims that there is a "better chance now than ever to end the war". With US presidential envoy Steve Witkoff and President Donald Trump's son-in-law, Jared Kushner, having arrived at the Kremlin a short time ago for talks with President Vladimir Putin, Zelenskyy says that he expects communication from the US team "straight away" after their meeting with the Russians. 

MNI SECURITY: Putin Meeting With Witkoff/Kushner Underway In Moscow

Reuters reporting that a meeting between Russian President Vladimir Putin, US Special Envoy Steve Witkoff, and US President Donald Trump's son-in-law Jared Kushner is underway in Moscow. Details of the meeting are likely to take several hours to filter through to newswires.

• Ukraine's Foreign Minister Andrii Sybiha wrote in a statement on X, "For the second day in a row, Putin makes statements that demonstrate that he does not plan to end the war. Yesterday he said he was prepared to fight through the winter. Today, he threatens sea ports and freedom of navigation."

MNI UKRAINE: Putin-Russia To Expand Strikes On Ukrainian Ports; Threatens Sea Access

Speaking ahead of talks with US officials, Russian President Vladimir Putin says that Russia will expand its strikes on Ukrainian ports and ships docking at these ports. This comes after Ukraine struck two oil tankers in the Black Sea that were part of Russia's 'shadow fleet' of vessels intended to circumvent sanctions. Putin claimed that these strikes amounted to 'piracy', and that if Ukraine is "cut off from the sea", it will not be able to engage in such acts. 

US TSYS

MNI US TSYS: Scaling Off Late Session Highs, Trump Teases Chair Pick Again

• Treasuries are see-saw off late session highs as Pres Trump continues to tease the potential Fed chair replacement, inferring Kevin Hassett again (Hassett odds were back to 80% on Polymarket vs 70% earlier today):
• Context on the Trump-Hassett headlines: [Listing off people in the room] "I guess a potential Fed chair is here too. I don’t know, are we allowed to say that, potential? He’s a respected person that I can tell you. Thank you Kevin."
• Treasuries had scale back support following earlier headlines that Pres Trump would wait until early 2026 to "probably" announce Chairman Powell's replacement. Chair Powell's 4Y term ends mid-May 2026.
• Currently, TYH6 trades +2 at 112-29 vs. 112-30.5 high. Monday’s move down resulted in a breach of both the 20-day EMA, but more importantly 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. A reversal higher is required to refocus attention on the key resistance and bull trigger at 113-29+, the Oct 17 high.
• The Atlanta Fed earlier today released its wage growth tracker for September, with a longer delay than would usually be the case after the delayed BLS payrolls report on Nov 20. It held steady at 4.1% Y/Y for a third consecutive month, as always reflecting the three-month average of median hourly wage growth.
• Wednesday Data Calendar: Monthly ADP, Import/Export Prices, IP/Cap-U and ISM Services.

OVERNIGHT DATA

MNI US DATA: Job Switchers Wage Growth Premium Highest Since Jan 2024

The Atlanta Fed wage tracker for back in September saw a second month of growing discrepancies between wage growth for job switchers and stayers. The relatively hotter pace for switchers doesn’t chime with the surprisingly strong climb in the u/e rate that month although this wage growth gap had previously been much weaker than other labor market slack metrics. 

• The Atlanta Fed earlier today released its wage growth tracker for September, with a longer delay than would usually be the case after the delayed BLS payrolls report on Nov 20. It held steady at 4.1% Y/Y for a third consecutive month, as always reflecting the three-month average of median hourly wage growth.

MNI US DATA: Redbook Retail Sales Point To Firmer Census Bureau Measure

The Johnson Redbook retail sales indicator firmed further in the last weekly release for November, citing retailers being “generally pleased” with their post-Thanksgiving sales. It continues to point to some renewed nominal momentum after last week’s disappointing Census Bureau retail sales report for September. The Johnson Redbook retail sales index firmed further in its latest weekly update, lifting to 6.4% Y/Y on a month-to-date basis up to Nov 29 after two weeks at 6.0% Y/Y and having ended October at 5.4% Y/Y. 

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA up 285.91 points (0.6%) at 47576.55
S&P E-Mini Future up 22 points (0.32%) at 6849.25
Nasdaq up 154.3 points (0.7%) at 23431.78
US 10-Yr yield is unchanged 0 bps at 4.0865%
US Mar 10-Yr futures are up 2.5/32 at 112-29
EURUSD up 0.0012 (0.1%) at 1.1622
USDJPY up 0.41 (0.26%) at 155.87
WTI Crude Oil (front-month) down $0.72 (-1.21%) at $58.60
Gold is down $21.13 (-0.5%) at $4210.88

European bourses closing levels:
EuroStoxx 50 up 18.69 points (0.33%) at 5686.17
FTSE 100 down 0.73 points (-0.01%) at 9701.8
German DAX up 121.42 points (0.51%) at 23710.86
French CAC 40 down 22.39 points (-0.28%) at 8074.61

US TREASURY FUTURES CLOSE

Curve update: 
3M10Y +1.574, 32.512 (L: 28.358 / H: 34.062)
2Y10Y +2.035, 57.441 (L: 54.967 / H: 58.956)
2Y30Y +2.532, 122.966 (L: 119.417 / H: 124.552)
5Y30Y +1.358, 108.468 (L: 106.209 / H: 109.25)
Current futures levels:
Mar 2-Yr futures up 1.375/32 at 104-12 (L: 104-10.25 / H: 104-12.375)
Mar 5-Yr futures up 2.5/32 at 109-16.25 (L: 109-11.5 / H: 109-17.25)
Mar 10-Yr futures up 2.5/32 at 112-29 (L: 112-22 / H: 112-30.5)
Mar 30-Yr futures up 3/32 at 116-10 (L: 115-28 / H: 116-13)
Mar Ultra futures up 3/32 at 119-20 (L: 119-02 / H: 119-26)

MNI US 10YR FUTURE TECHS: (H6) Pierces The 50-Day EMA

• 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:‌‌ 112-27 @ 11:12 GMT Dec 2
• SUP 1: 112-25   Intraday low
• 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 traded sharply lower yesterday. Monday’s move down resulted in a breach of both the 20-day EMA, but more importantly 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. A reversal higher is required to 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 +0.013 at 96.273
Mar 26 +0.025 at 96.450
Jun 26 +0.025 at 96.680
Sep 26 +0.025 at 96.850
Red Pack (Dec 26-Sep 27) +0.015 to +0.025
Green Pack (Dec 27-Sep 28) +0.010 to +0.015
Blue Pack (Dec 28-Sep 29) +0.010 to +0.015
Gold Pack (Dec 29-Sep 30) +0.005 to +0.010

REFERENCE RATES
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US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 4.12% (+0.00), volume: $3.454T
• Broad General Collateral Rate (BGCR): 4.07% (-0.01), volume: $1.299T
• Tri-Party General Collateral Rate (TCR): 4.07% (-0.01), volume: $1.270T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 3.89% (+0.01), volume: $85B
• Daily Overnight Bank Funding Rate: 3.89% (+0.01), volume: $151B

FED Reverse Repo Operation

RRP usage rises to $5.620B with 11 counterparties this afternoon from $3.240B Monday. 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: $1.8B Florida Power & Light 2Pt Launched

• Date $MM Issuer (Priced *, Launch #)
• 12/01 $1.8B #Florida Power & Light $650M 10Y +65, $1.15B 40Y +90
• 12/02 $1B #Manulife 10Y +90
• 12/02 $850M #American Tower 7Y +90
• 12/02 $500M *Ventas Realty 10Y +97
• 12/02 $500M #Synovus Bank 10NC5 +230

MNI FOREX: USDJPY Extends Bounce Amid Stabilising Risk Sentiment

• With little meaningful data on the global economic calendar Tuesday, risk sentiment has stabilised, with the major equity indices in the US tilting in the green. Furthermore, roughly 6% gains for bitcoin and general crypto advances have added to the overall optimistic backdrop. These dynamics have done little to move the needle for the USD index, which has spent the session consolidating the strong reversal off the lows yesterday.
• Price action across G10 FX has been muted, keeping volumes light across the board (EUR futures had posted ~65% of the volumes you'd expect to see towards the European close), contrasting with Monday's busier price action. After printing within 4 pips of key 1.1656 resistance yesterday, EURUSD has pulled back towards the 1.16 handle, of which we have been oscillating around on Tuesday.
• The Japanese yen is the weakest currency across the G10 amid the firmer risk backdrop, allowing USDJPY to consolidate its near 1% recovery from yesterday’s lows. The price action this week has created some false breaks on the chart, keeping bullish Cross/JPY conditions intact, for now. We pointed out that the adjustment of rate hike pricing between Jan and Dec meetings should have little lasting impact on yen sentiment, with broader risk conditions, domestic fiscal developments and China-Japan tensions more likely to drive the narrative.
• AUD's moderate strength is worth noting, and means AUDUSD has printed seven consecutive sessions of higher highs, narrowing the gap with 0.6580 in the process - the next notable resistance. One primary driver of AUD strength is the continued pullback in front-end vols. G10 FX vol has been sold firmly off the November peak, but 1m implied AUD vols are now the lowest of the year and the second lowest level since the onset of COVID in 2020.
• It’s a busier docket on Wednesday, with RBA Governor Bullock speaking before Australian Q3 GDP. Swiss CPI will then precede US ADP employment and ISM Services PMI data.

WEDNESDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
03/12/2025	0700/0200	*	TR	Turkey CPI
03/12/2025	0730/0830	***	CH	CPI
03/12/2025	0815/0915	**	ES	S&P Global Services PMI (f)
03/12/2025	0815/0915	**	ES	S&P Global Composite PMI (final)
03/12/2025	0845/0945	**	IT	S&P Global Services PMI (f)
03/12/2025	0845/0945	**	IT	S&P Global Composite PMI (final)
03/12/2025	0850/0950	**	FR	S&P Global Services PMI (f)
03/12/2025	0850/0950	**	FR	S&P Global Composite PMI (final)
03/12/2025	0855/0955	**	DE	S&P Global Services PMI (f)
03/12/2025	0855/0955	**	DE	S&P Global Composite PMI (final)
03/12/2025	0900/1000	**	EU	S&P Global Services PMI (f)
03/12/2025	0900/1000	**	EU	S&P Global Composite PMI (final)
03/12/2025	0930/0930	**	GB	S&P Global Services PMI (Final)
03/12/2025	0930/0930	***	GB	S&P Global/ CIPS UK Final Composite PMI
03/12/2025	1000/1100	**	EU	EZ PPI
03/12/2025	1000/1000	**	GB	Gilt Outright Auction Result
03/12/2025	1030/1130		EU	ECB Lane Keynote at Banca d'Italia Workshop on Exchange Rates
03/12/2025	1200/0700	**	US	MBA Weekly Applications Index
03/12/2025	1315/0815	***	US	ADP Employment Report
03/12/2025	1330/0830	**	US	Import/Export Price Index
03/12/2025	1330/1430		EU	ECB Lagarde Statement at ECON Hearing
03/12/2025	1415/0915	***	US	Industrial Production
03/12/2025	1445/0945	***	US	S&P Global Services Index (final)
03/12/2025	1445/0945	***	US	S&P Global US Final Composite PMI
03/12/2025	1500/1000	***	US	ISM Non-Manufacturing Index
03/12/2025	1530/1030	**	US	DOE Weekly Crude Oil Stocks
03/12/2025	1530/1030	**	US	US DOE Petroleum Supply
03/12/2025	1530/1630		EU	ECB Lagarde Statement at ECON Hearing (as ESRB Chair)
03/12/2025	1700/1700		GB	BOE Mann in Panel on Reserve Currencies
04/12/2025	0030/1130	**	AU	Trade Balance