MNI EUROPEAN OPEN: China Exports Post First Drop Since Feb

EXECUTIVE SUMMARY

• FED’S WILLIAMS SAY R-STAR TO STAY LOW IN U.S. - MNI BRIEF
• MUSALEM SAYS FED’S POLICY RATE IS APPROACHING NEUTRAL SETTING - BBG 
• US TO BLOCK NVIDIA’S SALE OF SCALED-BACK AI CHIPS TO CHINA - THE INFORMATION 
• ECB’S VUJCIC SAYS POLICY IN GOOD PLACE, WARNS OF MARKET RISKS - BBG 
• CHINA'S OCT EXPORTS -1.1%; FIRST DROP IN 8 MONTHS - MNI BRIEF
• CHINA ADVISORS SHARE THEIR GDP GRWOTH OUTLOOK - MNI 

Fig 1:  China Export & Imports - Y/Y 

Source: MNI - Market News/Bloomberg/Refinitiv. 

UK 

BOE (MNI BOE WATCH): The Bank of England Monetary Policy Committee left its policy rate on hold at 4.0% in November by the narrowest of margins, with four of the Committee’s nine members voting for a 25-basis point cut.

EU

ECB (BBG): “European Central Bank Governing Council member Boris Vujcic repeated his view that current policy is “in a good place,” adding that “we feel that we have done our job” after lowering inflation to the ECB’s target without provoking a recession.” 

GREECE (MNI): The Greek Public Debt Management Agency plans to issue EUR8 billion in 2026, with up to EUR5 billion coming from a 10-year bond and sales of other maturities depending on investor appetite, a source in the country’s treasury told MNI.

ECB (MNI INTERVIEW): Only a “substantial” deterioration in the growth and inflation outlooks would justify a rate cut in the next few months, the head of the Austrian National Bank told MNI, adding that the European Central Bank should not overreact to projected medium-term inflation undershoots and that a hike may even be necessary next year.

UKRAINE (BBG): " Ukraine Ambassador Olha Stefanishyna said her country is engaged in “positive” talks about buying Tomahawk missiles and other long-range weaponry, even after President Donald Trump signaled he didn’t want to send them to the country." 

US

FED (MNI BRIEF): Federal Reserve Bank of New York President John Williams said Thursday a prolonged period of low neutral interest rates appears likely to persist over the medium term in the United States and other major world economies. 

FED (BBG): “Federal Reserve Bank of St. Louis President Alberto Musalem said the US central bank must keep downward pressure on inflation and cautioned that interest rates are approaching the level which would no longer provide that pressure.” 

FED (MNI BRIEF): Federal Reserve Bank of Cleveland President Beth Hammack said Thursday interest rates should stay where they are to ensure inflation returns to goal, adding monetary policy is "only barely restrictive, if that." 

FED (MNI BRIEF): Federal Reserve Bank of Cleveland President Beth Hammack on Thursday encouraged banks to further take advantage of the central bank's standing repo facility backstop when funding pressures are high. 

FED (MNI BRIEF): “The Federal Reserve has little visibility on inflation without official government data and that warrants caution on interest rate cuts, Chicago Fed President Austan Goolsbee said Thursday.” 

GOVERNMENT (RTRS): “A federal judge on Thursday ordered U.S. President Donald Trump's administration to fully fund food aid for 42 million low-income Americans in November by Friday, blocking its plan to only provide reduced benefits during the government shutdown.” 

OTHER

TECH (BBG): " Fixed-income investors should tread carefully when it comes to funding the artificial intelligence boom, according to DoubleLine Capital’s Robert Cohen." 

JAPAN (BBG): "Japanese Prime Minister Sanae Takaichi said the government’s target of achieving a primary balance surplus, a goal in the pursuit of fiscal consolidation, would no longer be reviewed on a single-year basis, but the strategy would be revised to aim for a balance over several years. Speaking in the lower house of parliament Friday, Takaichi said, “it’s fair to think that economic policy has changed.”

CANADA (MNI BRIEF): Bank of Canada Governor Tiff Macklem on Thursday said Mark Carney's first budget introduced this week marks a "significant change" towards reviving lagging investment and productivity, a stronger-than-usual view on questions about fiscal policy he normally avoids.

CANADA (MNI BRIEF): Bank of Canada Governor Tiff Macklem told lawmakers Thursday while he would be concerned if headline inflation drifted up towards where underlying inflation has been running, companies face upside and downside pressures linked to the U.S. trade war.

CHINA 

GROWTH (MNI): China advisors share their GDP growth outlook. On MNI Policy MainWire now, for more details please contact sales@marketnews.com.

US/CHINA (THE INFORMATION): “The White House has told others in the federal government it won’t allow Nvidia to sell its latest scaled-down AI chips to China, despite President Donald Trump’s hints over the summer that he might allow the company to do so, according to three people with knowledge of the matter.” 

TRADE (MNI BRIEF): "China's exports decreased 1.1% y/y in October, while imports rose 1.0%, data released by China Customs showed on Friday. Exports in October fell 1.1% y/y to USD305.4 billion, quickly down from the previous 8.3% growth and failed meeting the expectations for a 2.5% increase. Imports gained 1.0% y/y, slower from 7.4% in September and behind the 2.5% market consensus.

MNI: PBOC Net Drains CNY213.4 Bln via OMO Friday

MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY141.7 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net drain of CNY213.4 billion after offsetting maturities of CNY355.1 billion today, according to Wind Information. 

• The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.4032% at 09:31 am local time from the close of 1.4254% on Thursday.
• The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 50 on Thursday, compared with the close of 49 on Wednesday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.

MNI: PBOC Sets Yuan Parity Lower At 7.0836 Fri; +1.67% Y/Y

MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 7.0836 on Friday, compared with 7.0865 set on Thursday. The fixing was estimated at 7.1151 by Bloomberg survey today.

MARKET DATA

JAPAN SEP HOUSEHOLD SPENDING Y/Y 1.8%; MEDIAN 2.5%; PRIOR 2.3% 

CHINA OCT EXPORTS Y/Y -1.1%; MEDIAN 2.9%; PRIOR 8.3% 
CHINA OCT IMPORTS Y/Y 1.0%; MEDIAN 2.7%; PRIOR 7.4% 
CHINA OCT TRADE BALANCE $90.07BN; MEDAIN $96.85BN; PRIOR $90.45BN

MARKETS

US TSYS: Treading Water Ahead Today's Fed Speakers & UofM Sentiment Data

TYZ5 is dealing at 112-26, -0-00+ from closing levels in today's Asia-Pac session.

• Yesterday, US tsys turned to alternative employment data due to the ongoing US Govt shutdown and finished richer.
• Cash US tsys are slightly cheaper in today's Asia-Pac session after yesterday's solid rally.
• Due to the ongoing US Government shutdown, the Bureau of Labour Statistics' October employment report has been suspended. Focus will be on Fed speakers, University of Michigan Sentiment / Expectations and Consumer Credit.
•  

JGBS: Slightly Cheaper After A Subdued End To the Week, BOJ SOO On Monday

JGB futures are unchanged after giving up overnight gains fueled by a rally in US tsys. 

• Yesterday, US tsys turned to alternative employment data due to the ongoing US Govt shutdown. Revelio Labs' estimate of October nonfarm payrolls growth showed its first negative M/M reading since May.
• Cash US tsys are slightly cheaper in today's Asia-Pac session after yesterday's solid rally.
• MNI - Sep Household Spending Below F/Cs, Focus To Get Real Wages Higher: Japan Sep real household spending data was softer than forecast. Real spending fell 0.7% m/m, against a -0.1% forecast (per Rtrs). In y/y terms, we were up 1.8%y/y, against a 2.5% forecast. Given generally softer cash earning outcomes in recent month,s some moderation in spending was not a surprise. The authorities' focus will remain on returning cash earnings growth to real positive territory, as without that, we may see spending trends soften as we progress towards year-end and into 2026.
• Cash JGBs are flat to 1bp cheaper across benchmarks. The benchmark 10-year yield is 0.1bp higher at 1.684% versus the cycle high of 1.705%.
• Swap rates are 1-2bps higher.
• On Monday, the local calendar will see BOJ Summary of Opinions (Oct. MPM) and Leading/Coincident Index data alongside a speech by BOJ Board Nakagawa in Okayama.

AUSSIE BONDS: Richer But Off Bests, YC Vulnerable To Rates Outlook

ACGBs (YM +2.0 & XM +2.5) are stronger but near-session cheaps.

• Cash ACGBs are 2-3bps richer with the AU-US 10-year yield differential at +25bps.
• Unlike its NZ counterpart, which has steepened to its highest level since 2021, the ACGB yield curve remains near its flattest point since April, following the RBA’s decision this week to keep the cash rate unchanged at 3.60%. The RBA was generally cautious with future decisions remaining highly data dependent. Consistent with this message, the AU 3s10s yield curve appears vulnerable to any upward revision in year-ahead cash rate expectations (see chart).
• The latest round of ACGB Nov-33 supply sees very strong pricing, with the weighted average yield printing 0.66bp through prevailing mids (per Yieldbroker) with a cover ratio of 4.9300x.
• Over the past three weeks, interest expectations for year-end in NZ, along with Canada, have been the clear outperformer in the $-bloc, with a slight softening (-2bps). In contrast, year-end expectations for official rates have risen 15bps in the US and 25bps in Australia over the same period.
• The bills strip is flat to +2 across contracts, with a flattening bias.
• RBA-dated OIS pricing is showing a 25bp rate cut in December at an 11% probability, with a cumulative 20bps of easing priced by mid-2026.
   

Bloomberg Finance LP

BONDS: NZGBS: Curve Steepener Takes A Breather

NZGBs closed showing a bull-flattener, with benchmark yields 2-5bps lower.

• Today's move sees the 2/10 curve pull back from cycle highs, just shy of the 2021 high. (see chart)
• The NZ-US 10-year yield differential was unchanged on the day at -1bp, while the NZ-AU differential was 3bps narrower at -26bps.
• Swap rates closed 3-4bps lower.
• RBNZ dated OIS pricing closed little changed across meetings. 28bps of easing is priced for November, with a cumulative 37bps by February 2026.
• Over the past three weeks, year-end rate expectations in NZ — along with Canada — have been the clear outperformers within the $-bloc, easing slightly by 2bps. In contrast, year-end expectations for policy rates have risen by 15bps in the US and 25bps in Australia over the same period.
• On Monday, the local calendar will be empty. The next release of note will be the RBNZ's Inflation Expectations data on Tuesday.

Bloomberg Finance LP

FOREX: Asia-Pac FX: The USD Drifts Higher As Risk Struggles In Asia

The BBDXY has had a range today of 1220.82 - 1222.64 in the Asia-Pac session; it is currently trading around 1222, +0.10%. Some interesting price action overnight as risk took another leg lower but the USD actually fell outside of pairs that are used as risk proxies such as the AUD, JPY and CHF. Some poor employment data and a market awaiting the Supreme Court ruling has given the USD bulls some pause. Intra-day I suspect sellers should re-emerge back toward the 1223.50 area, the first real buy zone is back toward the 1215 area. Look for the USD to do some work and chop around within the 1215-1230 range. A negative Supreme court ruling would be a dagger in the heart of the USD but these cases can take months to be decided so it's tough to be taking a clear directional view based on that outcome in the present moment.

• EUR/USD -  Asian range 1.1535 - 1.1552, Asia is currently trading 1.1535. The pair continued to build on its support below 1.1500, I suspect rallies will now be sold toward the 1.1600-1.1650 area initially.
• GBP/USD - Asian range 1.3116 - 1.3142, Asia is currently dealing around 1.3115. The pair built on its bounce off the 1.3000 area yesterday. I continue to favor fading rallies though as GBP looks to have put in a medium term top. The first  resistance is around 1.3150 but the 1.3250-1.3300 area is the place to fade if we see that level again.
• Cross asset : SPX -0.05%, Gold $3995, US 10-Year 4.093%, BBDXY 1222, Crude Oil $59.77
• Data/Events : France Trade Balance, Germany Trade Balance

Fig 1: GBP/USD Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

NZD: Asia-Pac: NZD/USD Trades Heavy Toward 0.5600 As Risk Slides

The NZD/USD had a range of 0.5615 - 0.5641 in the Asia-Pac session, going into the London open trading around 0.5620, -0.25%. Looks like there could be more to this pullback in risk and the NZD is being dragged lower with the AUD as a risk proxy. The price action is interesting in that the NZD was able to move lower even with the USD back under pressure. I am a little wary of positioning in the NZD market but price action for the moment is re-assuring. Look for rallies to remain heavy while risk stays under pressure, with the 0.5600 target basically reached the next target will be the pivotal 0.5500 area.

• China Weaker Headline Export & Import Growth, But Caveats Apply: China's headline Oct trade figures were weaker than forecasts, with export growth falling to -1.1%y/y, the weakest result since Feb this year (the market forecast a drop from 8.3% to 2.9%). Imports also moderated to 1.0%y/y from 7.4% in Sep (2.7% was the forecast). The important caveat is that we had the National Day holiday period in the first part of Oct (1st to the 8th), which could have impacted, while we were also coming off a high base of export growth from last year (+12.6%y/y for Oct 2024).
• Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.5600(NZD538m Nov12), 0.5800(NZD461m Nov 12) - BBG

Fig 1: NZD/USD Spot Weekly Chart

Source: MNI - Market News/Bloomberg Finance L.P

AUD: Asia-Pac: AUD/USD Drifts Lower With Risk

The AUD/USD has had a range today of 0.6468 - 0.6487 in the Asia- Pac session, it is currently trading around 0.6470, -0.20%. Looks like there could be more to this pullback in risk and the AUD is normally everyone's favourite proxy to use, should this correction in risk build the recent outperformance of the AUD especially in the crosses would be most at risk. The AUD/USD has moved back toward the 0.6450 area where it found good support earlier in the week. A lot rides on how risk trades from here, a break of the 0.6450 area would then target the more important 0.6350 area. Rallies above 0.6500 should find sellers on the day while risk trades poorly.

• "CHINA, AUSTRALIA OFFICIAL DISCUSS MULTILATERAL TRADING SYSTEM" - BBG
• MNI AU - Weaker Headline Export & Import Growth, But Caveats Apply : China's headline Oct trade figures were weaker than forecasts, with export growth falling to -1.1%y/y, the weakest result since Feb this year (the market forecast a drop from 8.3% to 2.9%). Imports also moderated to 1.0%y/y from 7.4% in Sep (2.7% was the forecast). The important caveat is that we had the National Day holiday period in the first part of Oct (1st to the 8th), which could have impacted, while we were also coming off a high base of export growth from last year (+12.6%y/y for Oct 2024).
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6500(AUD1.22b), 0.6550(AUD 415m), 0.6600(AUD682m). Upcoming Close Strikes : 0.6500(AUD1.19b Nov 12), 0.6530(AUD882m Nov 12)- BBG

Fig 1: AUD/USD spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

JPY: Asia-Pac: USD/JPY Consolidates Around 153.00

The USD/JPY range today has been 152.82 - 153.31 in the Asia-Pac session, it is currently trading around 153.10, +0.05%. The pair failed overnight again above the 154.00 area as cross-Yen came back under pressure as risk turned lower again. A lot depends on what your view is for risk from here, but the price action of the last few days signals we could be putting in a potential top and if a correction in risk plays out then I suspect the resistance around the 154/155 area should continue to offer solid resistance. With the crosses under pressure we could see some further pullbacks and therefore I suspect rallies on the day toward 153.50 should find better sellers, but I do think any correction lower will still find buyers happy to fade. The first buy zone is toward 151.50-152.00 and then the more important 149.00-150.00 area.

• MNI AU - Sep Household Spending Below F/Cs, Focus To Get Real Wages Higher: Japan Sep real household spending data was softer than forecast. Real spending fell 0.7%m/m, against a -0.1% forecast (per Rtrs). In y/y terms we were up 1.8%y/y, against a 2.5% forecast. Given generally softer cash earning outcomes in recent months some moderation in spending was not a surprise. The authorities focus will remain on returning cash earnings growth to real positive territory as without that we may see spending trends soften as we progress towards year end and into 2026.
• Options : Close significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : none - BBG.

Fig 1 : USD/JPY Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

ASIA STOCKS: Down As Kospi Pullback Continues, Philippines Near 2022 Lows

Major Asia Pac equity indices are faltering into the end of the week, amid concerns around US jobs momentum and elevated AI/tech valuations. US equity futures are modestly in the red, struggling for fresh upside, post cash losses in Thursday trade. Kospi weakness/volatility remains a standout. The Main index is off close to 3% at the time of writing, putting the index back near the 3900 level. Japan markets are down 2.2% in terms of the NKY 225, while most other markets are weaker as well, despite some modest pockets of strength in South East Asia. 

• Offshore investors have sold close to $5bn of local South Korea stocks this week, the most since 2021. Trends today are skewed towards selling by offshore investors but in much more modest size, while local retail investors are buying the dip. South Korean stocks are a good barometer for both global and tech related trends, and given the extent of the recent run higher, some paring in risk is not surprising. Note even with this recent correction, the Kospi index is still 71% above early Apr lows.
• Japan markets had also seen strong offshore inflows through much of Oct, so some paring of risk may also be playing a role in this week's correction. The NKY 225 is challenging 20-day EMA support and is back under 50,000.
• China and Hong Kong markets are also weaker, the HSI down 1.1%. The tech sub index is off 2%. Earlier headlines crossed that the US would restrict Nvidia chip sales to China (even for scaled down products). The CSI 300 index is off 0.20%. We had Oct trade data which was weaker than expected earlier, with exports falling into negative territory, but there was a large holiday period in Oct and this also pre-dates the US-China trade truce.
• In South East Asia, most markets are only down modestly or up slightly. Indonesia remains an outperformer, while a resilient growth and domestic backdrop is also helping the Malaysian market (although recent ranges hold).
• The exception is the Philippines, where much weaker than expected Q3 GDP growth has weighed. The PCOMP was last down 1.5% to fresh lows last seen in 2022 (last around 5750 in index terms). 

Gold - Trades In A $3900-$4100 Range As It Tries To Build A Base

The range overnight for gold was $3 965.87 - $4 019.60/oz, Asia is currently trading around 3991.00/oz, +0.35%. It had little reaction to the weakening US jobs data seen overnight. Gold has been chopping around sideways the last few days after finding support once more toward the $3,900/oz area. The market is trying to form a base from which to test higher again, the range looks set to be $3900-$4100/oz while this plays out.

• Otavio Costa of Crescat Capital reiterated his bullish sentiment on X, “This is a useful gauge of how far we still are from bubble territory in gold and the mining sector, in my view. Together, they currently represent about 5% of total global assets. That is approximately 7–5 times below the highs reached in prior cycles. Keep in mind that today’s debt imbalances are far worse than at any other time in history.  

Fig 1 : Gold & Gold Miners % Of Total Global Assets

Source: MNI - Market News/Bloomberg/Crescat Capital

UP TODAY (TIMES GMT/LOCAL) 

Date	GMT/Local	Impact	Country	Event
07/11/2025	0700/0800	**	DE	Trade Balance
07/11/2025	0745/0845	*	FR	Foreign Trade
07/11/2025	0800/0300		US	New York Fed's John Williams
07/11/2025	1110/1110		GB	BOE Saporta At ECB Money Market Conference
07/11/2025	1200/0700		US	Fed Vice Chair Philip Jefferson
07/11/2025	1200/1200		GB	BOE Market Participants Survey
07/11/2025	-		GB	BOE MPG Agenda Published
07/11/2025	1330/0830	***	CA	Labour Force Survey
07/11/2025	1330/0830	***	US	Employment Report
07/11/2025	1330/0830	***	US	Employment Report
07/11/2025	1330/0830	***	US	Employment Report
07/11/2025	1330/0830	***	US	Employment Report
07/11/2025	1330/1430		EU	ECB Elderson At Bundesbank Event
07/11/2025	1500/1000	**	US	University of Michigan Surveys of Consumers Inflation Expectation
07/11/2025	1500/1000	***	US	U. Mich. Survey of Consumers
07/11/2025	1515/1515		GB	BOE Pill At National Agency Briefing
07/11/2025	1600/1100	**	US	NY Fed Survey of Consumer Expectations
07/11/2025	1800/1300	**	US	Baker Hughes Rig Count Overview - Weekly
07/11/2025	1800/1300	**	US	Baker Hughes Rig Count Overview - Weekly
07/11/2025	1800/1300	**	US	Baker Hughes Rig Count Overview - Weekly
07/11/2025	2000/1500	*	US	Consumer Credit
07/11/2025	2000/1500		US	Fed Governor Stephen Miran