MNI EUROPEAN OPEN: EUR/AUD Breaks Lower
EXECUTIVE SUMMARY
- KEIR STARMER’S PREMIERSHIP IS AGAINST THE ROPES - BBG
- EU LEADERS TO SEEK TO PROTECT FIRMS, BUILD SCALE - MNI
- FED'S HAMMACK - COULD HOLD 'FOR QUITE SOME TIME - MNI
- STRONGER DEMAND DROVE HIKE - RBA'S HAUSER - MNI
- CHINA JANUARY CPI GROWTH SLOWS TO 3-MONTH LOW - MNI
Fig 1: EUR/AUD Breaking Lower
Source: Bloomberg Finance L.P/MNI
UK
POLITICS (BBG): “Keir Starmer’s premiership is against the ropes, posing risks for the UK outlook, including a near-term spike in policy uncertainty, the prospect of looser fiscal policy, and higher borrowing costs. A new leader in the UK could change the trajectory of borrowing by ditching current fiscal rules or back-loading fiscal consolidation plans, risking credibility with investors.”
EU
POLITICS (MNI): EU Leaders To Seek To Protect Firms, Build Scale: European leaders meeting this week will discuss how to encourage startups and ease competition rules to help companies gain scale, as well as a more controversial French proposal to favour European companies in public procurement and how to protect strategic industries from ever more ferocious global competition, a senior EU official said on Tuesday.
RUSSIA (BBG): “Russia’s crude shipments are holding steady, but the steeper discounts that are keeping the barrels flowing have hammered the Kremlin’s revenues. Volumes averaged 3.33 million barrels a day in the four weeks to Feb. 8, down from the pre-Christmas peak, with shipments to India falling to less than half their peak level.”
US
FED (MNI BRIEF): Fed's Hammack - Could Hold 'For Quite Some Time': The Federal Reserve could be in a position to keep interest rates on hold for a while now that borrowing costs are in the range of neutral and risks to employment and inflation appear to be abating, Cleveland Fed President Beth Hammack said Tuesday.
FED (MNI BRIEF): Fed's Logan More Worried About Inflation Than Jobs: Federal Reserve Bank of Dallas President Lorie Logan said Tuesday she is more worried about persistently elevated inflation than further worsening in the labor market, and no further rate cuts would be needed if inflation comes down this year.
FED (MNI BRIEF): Fed's Logan Warns Of Basis Trade Vulnerabilities: The Treasury cash-futures basis trade can de-lever very rapidly during stress periods in money markets and large margin-call changes, Federal Reserve Bank of Dallas President Lorie Logan warned Tuesday, noting "phenomenal" growth in basis trades over the past year and the highly levered hedge funds that participate.
FED (MNI INTERVIEW): Fed Assets Hard To Shrink Due To Deficit-Hoenig: The Federal Reserve will have a difficult time shrinking its balance sheet despite the stated predilection for doing so of Chair nominee Kevin Warsh, as gaping U.S. budget deficits require ongoing central bank largesse, former Kansas City Fed President Thomas Hoenig told MNI.
MACRO (MNI BRIEF): Lower Income US Borrowers See Rise In Delinquencies: Lower income groups, younger workers and the unemployed are seeing rising delinquency rates through the fourth quarter of 2025, further evidence of a "K-shaped economy" in which lower paid workers struggle while the overall household debt picture remains relatively healthy, New York Fed researchers said Tuesday.
US/IRAN (BBG): "The US and Iran each struck a positive tone about the start of diplomatic talks, though analysts remain skeptical that the engagement will be enough to head off US airstrikes."
JAPAN
FX (DJ): “The Japanese yen could recover further given the prospect of looser fiscal policy combined with tighter monetary policy, ING analysts say in a note. Japan Prime Minister Sanae Takaichi has a strong mandate to deliver on growth and aggressive foreign policy after her Liberal Democratic Party secured a majority in Sunday's snap election, they say.”
OTHER
AUSTRALIA (MNI BRIEF): The Reserve Bank of Australia’s 25bp February hike to 3.85% reflected stronger global growth, looser financial conditions and firmer private demand relative to supply, Deputy Governor Andrew Hauser said at an industry event Wednesday.
GOLD (BBG): “Gold wavered around $5,000 after a two-day gain, as investors assess whether prices have found a floor following a historic selloff. Bullion has retreated about 10% since hitting a record on Jan. 29, though it remains firmly higher for the year. Many banks and asset managers have backed a recovery in bullion, with UBS's Mark Haefele writing that worries about the value of gold as a hedge are overdone.”
SILVER (BBG): “International silver prices have steadied after a bout of turbulence, but supplies in China are still being pinched as investment and industrial demand drain stockpiles. Demand for investment bars and industrial needs, such as China's solar manufacturers, are contributing to the tightness in the silver market, with stockpiles at warehouses linked to the SHFE and SGE dropping to levels last seen more than a decade ago.”
CHINA
CPI (MNI BRIEF): China January CPI Growth Slows To 3-Month Low: China’s Consumer Price Index rose 0.2% y/y in January, down from December's 0.8% growth to hit a three-month low, missing expectations for a 0.4% gain, according to data from the National Bureau of Statistics released Wednesday.
FISCAL (MNI): China Press Digest Feb 11: Dividends, Fiscal, Monetary: Chinese authorities will prioritise closer fiscal and financial coordination to support the expansion of domestic demand in 2026, the latest report from the People’s Bank of China indicated.
MNI: PBOC Net Injects CNY403.5 Bln via OMO Wednesday
MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY78.5 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The PBOC conducted another CNY400 billion via 14-day reverse repos today. The operation led to a net injection of CNY403.5 billion after offsetting the maturity of CNY75 billion today, according to Wind Information.
- The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.5041% at 09:50 am local time from the close of 1.5574% on Tuesday.
- The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 49 on Tuesday, compared with the close of 55 on Monday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.
MNI: PBOC Sets Yuan Parity Lower At 6.9438 Weds; +5.01% Y/Y
MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 6.9438 on Wednesday, compared with 6.9458 set on Tuesday. The fixing was estimated at 6.9109 by Bloomberg survey today.
MARKET DATA
AUSTRALIA INVESTOR LOANS QOQ 7.6%; 18.7% PRIOR REVISED
AUSTRALIA HOME LOANS QOQ 9.5%; 4.8% ESTIMATE; 10.9% PRIOR REVISED
AUSTRALIA OWNER-OCC LOANS QOQ 10.6%; 6.2% PRIOR REVISED
CHINA JAN PPI YOY -1.4%; -1.5% ESTIMATE; -1.9% PRIOR
CHINA JAN CPI YOY 0.2%; 0.4% ESTIMATE; 0.8% PRIOR
SOUTH KOREA JAN UNEMP RATE 3.0%; 3.1% EST; 3.3% PRIOR REVISED
SOUTH KOREA FEB EXPORTS 10D 44.4%; -2.3% PRIOR
SOUTH KOREA FEB IMPORTS 10D 21.1%; -4.5% PRIOR
SOUTH KOREA BANK LENDING TO HH KR1172T; KR1173.6T PRIOR
MARKETS
US TSYS: Cash Closed, Risks of Better NFP Not Priced
With Japan closed, it was only futures that traded today with volumes low. The 10-Yr traded in a range of 112-15+ to 112-19, finishing at the top end of the range for a gain of +02 today.
Its a big day Wednesday for data given the delayed Non Farm Payrolls and various Fed Speakers.
US Data/Speaker Calendar (prior, estimate). All times ET
02/11 0700 MBA Mortgage Applications (-8.9%, --)
02/11 0830 Change in Nonfarm Payrolls (50k, 67k)
02/11 1000 KC Fed Schmid moderated discussion on economy, mon-pol
02/11 1015 Fed VC Bowman moderated discussion
02/11 1130 US Tsy $69B 17W bill auction
02/11 1300 US Tsy $42B 10Y Note auction (91282CPZ8)
02/11 1400 Federal Budget Balance (-$144.7B, -$94.4B)
02/11 1600 Cleveland Fed Hammack on leadership (no text, Q&A)
Source: Bloomberg Finance L.P. / MNI
- There is a US$69bn 17-week and a US$42bn 10-Yr auction tonight
Yields have fallen more than expected in recent days, taking them back below the mid point of the 1 m range. The data suggests the economy is slowing (as evidenced by the recent peak in GDPNow) and yields should be lower. However the risks are now (given recent moves) that NFP in line or marginally stronger could see a modest unwind of the recent rally.
AUSSIE BONDS: Richer Ahead Of US NFP, Stronger Demand Drove Hike - RBA Hauser
ACGBs (YM +3.0 & XM +6.5) are stronger.
- MNI: The Reserve Bank of Australia’s 25bp February hike to 3.85% reflected stronger global growth, looser financial conditions and firmer private demand relative to supply, Deputy Governor Andrew Hauser said.
- There has no cash US tsys dealings in today's Asia-Pac session, with Japan out on holiday.
- All focus turns to today's US employment data. Monthly payroll growth is currently expected at 70k in January for a slight acceleration from the 50k in December and 56k in November.
- Cash ACGBs are 2-5bps richer, with the 3/10 curve flatter.
- The latest ACGB April 2037 auction attracted solid demand, with the weighted average yield printing 0.68bps through prevailing mid-yields.
- Moreover, the cover ratio jumped sharply to 4.1429x from 3.4933x at the previous auction. The AOFM also plans to sell A$1000mn of the 2.50% 21 May 2030 bond on Friday.
- The bills strip has bull-flattened, with pricing flat to +3 across contracts.
- RBA-dated OIS pricing shows tightening across all meetings, with the probability of a 25bp hike rising from 15% for March to 93% by June and 146% by December 2026.
- Tomorrow, the local calendar will see Consumer Inflation Expectation data alongside the RBA’s Senate Testimony and RBA Hunter’s Speech.
Bloomberg Finance LP
BONDS: NZGBS: Bull-Flattener Leaves Curve At Its Flattest Since Nov
NZGBs closed showing a bull-flattener, with benchmark yields 2-4bps lower.
- Nevertheless, NZGBs underperformed ACGBs with the NZ-AU 10-year yield differential 2bp wider on the day.
- There has no cash US tsys dealings in today’s Asia-Pac session, with Japan out on holiday.
- (Bloomberg) “New Zealand’s government has started an independent review of New Zealand’s monetary policy response to the Covid-19 pandemic. Purpose of the review is to identify lessons New Zealand could learn to improve the monetary policy response to future major events.”
- Swap rates closed 2-5bps lower, with the 2s10s curve flatter. At 1.06, the curve is at its flattest since late November (see chart).
- RBNZ-dated OIS pricing closed little changed across meetings. No tightening is priced for February, while December 2026 assigns 43bps.
- The local calendar will be light until Friday's release of BusinessNZ Manufacturing PMI, Net Migration and RBNZ Inflation Expectation data.
- Tomorrow, the NZ Treasury plans to sell NZ$250mn of the 1.50% May-31 bond and NZ$200mn of the 4.5% May-35 bond.
Bloomberg Finance LP
FOREX: USD - BBDXY Testing 1175-1180 Into Employment Data
The BBDXY has had a range today of 1179.42 - 1183.25 in the Asia-Pac session; it is currently trading around 1179, -0.25%. The USD has fallen below most short-term supports and is looking to the lows seen in January now. It does not take a lot for the sellers to come back to market as nobody wants to miss out on this trade. The break lower in US yields is just adding to the USD headwinds and the market will be bracing for more bad news from the employment data tonight. On the day, the first resistance is toward the 1185-1187 area and then 1195 where I suspect we could see sellers return. A sustained break below 1175-1180 could potentially signal the start of another leg lower targeting 1150 first and then potentially 1115.
- EUR/USD - Asian range 1.1886-1.1915, Asia is currently trading 1.1915. The pair is consolidating around 1.1900 as the USD comes back under pressure and we await US employment data tonight. Price action has been pretty constructive after the initial sell-off and the support just below 1.1800 proved to be solid, can it now build some momentum from that base ? On the day, the first support is back toward the 1.1860-1.1890 area and then 1.1770-1.1800.
- GBP/USD - Asian range 1.3632-1.3670, Asia is currently dealing around 1.3665. The pair like everything is trying to bounce as the USD struggles. GBP looks like 1.3580-1.3730 to me for now as we wait to see if the big USD could potentially break lower. Should this play out then a move back above 1.4000 is back on the cards.
- Cross asset : SPX +0.30%, Gold $5057, US 10-Year 4.14%, BBDXY 1179, Crude Oil $64.48
- Data/Events : Italy Industrial Production
Fig 1: GBP/USD Spot Weekly Chart
Source: MNI - Market News/Bloomberg Finance L.P
JPY: USD/JPY - Continues To Drift Lower As The USD Trades Poorly Into NFP
The USD/JPY range today has been 153.51 - 154.52 in the Asia-Pac session, it is currently trading around 153.55, -0.55%. USD/JPY could not bounce at all and was back under pressure from the open and has remained so all through our session. The price action on Monday in response to the election outcome showed it was mostly priced in, and we have seen some “buy the rumour, sell the fact” play out. I thought we would see better demand back toward the 155.00 area initially but this move in US yields is causing the Yen shorts some angst. This price action does look messy but I still believe dips back toward the 149-152 will probably provide solid support again should we see it, until then it looks like we chop around albeit with a heavy tone as we await tonight's US labour data which will directly impact that move in US yields. On the day, the first resistance is back towards 154.75-155.15 and then the 155.80-156.20 area as the market pares back its USD longs and looks for another base to from from which to move higher again.
- “Deutsche Bank strategists said they’re no longer bearish on the yen after PM Sanae Takaichi’s election victory.” - BBG
- Options : Close significant option expiries for NY cut, based on DTCC data: 156.50($1.16b), 156.60($550mm). Upcoming Close Strikes : 158.50($1.57b Feb 13), 159.00($1.91b Feb 13),160.00($3.06b Feb 13) - BBG.
- The USD/JPY Average True Range(ATR) for the last 10 Trading days: 154 Points
Fig 1 : US 10-Year Yield Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
AUD/USD-Extends Above 0.7100 As Hauser Says: "Will Do What's Necessary"
The AUD/USD has had a range today of 0.7067 - 0.7128 in the Asia- Pac session, it is currently trading around 0.7125. The AUD took another leg up across the board as the market reacted to Hauser saying they “will do what's necessary to return inflation to target”. The USD is again back under pressure and the move lower in yields overnight is just adding to its headwinds, the AUD remains a favourite vehicle to express a long against it. The AUD has been outperforming across the board as leveraged funds continue to add to their longs as further hikes are potentially priced in. On the day, the first support is back toward the 0.7040–0.7070 area, and then the 0.6950 area. The bulls will be looking for dips to remain supported in order to break above the pivotal 0.7100-0.7200 area. A sustained break above here targets 0.7600-0.7800 first and then 0.8000-0.8200.
- "HAUSER: WILL DO WHAT'S NECESSARY TO RETURN INFLATION TO TARGET" - BBG
- MNI BRIEF: Stronger Demand Drove Hike - RBA's Hauser. The RBA’s 25bp February hike to 3.85% reflected stronger global growth, looser financial conditions and firmer private demand relative to supply. The reason policy turned around in February is because the facts changed,” he said, referring to last week’s decision.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.7010(AUD560m). Upcoming Close Strikes : 0.6800(AUD1.55b Feb 13), 0.6850(AUD933m Feb 12) - BBG
- The AUD/USD Average True Range for the last 10 Trading days: 80 Points
Fig 1: AUD/USD spot Weekly Chart
Source: MNI - Market News/Bloomberg Finance L.P
NZD/USD - Dragged Back Toward 0.6100 As The USD Gets Hit
The NZD/USD had a range today of 0.6037-0.6066 in the Asia-Pac session, it is currently trading around 0.6065, +0.33%. The NZD is pushing above its overnight highs that saw its momentum stall as the USD trades poorly into NFP. On the day, the NZD bulls will be hoping the pair can maintain its upward momentum to test the pivotal 0.6100 area. The first support is back toward 0.6025-0.6045 and then the 0.5900-0.5950 area. A sustained break back above 0.6100 could potentially open up a move back toward the 0.6400-0.6600 area and then beyond.
- MNI - Westpac Expects RBNZ To Raise Rates More Quickly In 2027: Westpac now expects the RBNZ to raise rates more quickly in 2027 (as spare capacity is exhausted). It maintains the start of the hiking cycle is expected in Dec of this year. The next RBNZ meeting is on Feb 18, next Wednesday. Market pricing, per OIS markets, is very flat for the first few meetings this year (around 2.25%, the current target rate). A full 25bps hike is priced by around the Oct meeting this year.
- Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.5900(NZD301m Feb16), 0.6200(NZD430m Feb 16) - BBG
- The NZD/USD Average True Range for the last 10 Trading days: 61 Points
Fig 1: NZD/USD Spot Weekly Chart
Source: MNI - Market News/Bloomberg Finance L.P
ASIA STOCKS: Positive Bias Continues on JN / AI Optimism; Eyes on NFP
- Despite Japanese markets closed today, optimism from the PM's recent landslide victory continued to provide a supportive regional backdrop. The day’s primary driver was cooling U.S. retail sales. This raised expectations for Federal Reserve rate cuts later this year, boosting risk appetite across the region. Markets look ahead tonight to non farm payrolls for further indications for rates with Trump talking up NFP prospects, whilst FED officials suggest rates are on hold for some time.
- China's CPI for January missed expectations whilst the PPI remained in contraction, though base effects were strong. While this underscored weak domestic demand, it also increased expectations for further stimulus from Beijing to hit its 2026 growth target. Moves in China's major bourses were muted today with HSI up +0.4% whilst CSI 300 was down -0.15%
- The KOSPI and TAIEX - both considered tech heavy - were higher today with the TAIEX up +1.6% on TSMC gains of +2.4% and the KOSPI up +1.2% despite a mixed day for AI stocks. Despite recent global volatility in tech valuations, Asian tech hubs like South Korea and Taiwan remain well supported by global investors with recent days seeing in a surge of inflows into Taiwan stocks.
- The JCI has delivered three consecutive days of strong gains, up +1.6% today at 8,270; near to the upside resistance via the 100-day EMA at 8,359. Momentum indicators remain bearish for the JCI with the MACD line below the signal. A negative MACD value means the 12-day Exponential Moving Average (EMA) is significantly below the 26-day EMA.
OIL: Bias for Higher Prices on US Iran Threats
- The Trump administration has discussed whether to seize Iranian oil tankers involved to pressure Tehran but have held off, concerned about the regime's near-certain retaliation and the impact on global oil markets, U.S. officials said. (per BBG)
- President Trump has said that the leadership in Tehran “want to make a deal. I think they’d be foolish if they didn’t,” according to remarks to Fox Business. Wednesday in the US he is due to meet with Israeli Prime Minister Benjamin Netanyahu at the White House to discuss the situation with oil investors looking for indications as to the next steps.
- The American Petroleum Industry reported inventories swelled by 13.4 million barrels last week, which would be the largest jump in barrel terms since November 2023 if confirmed. (per BBG)
- WTI edged up +0.8% today to US$64.49 bbl, having traded in a tight range of $64.15 - $64.63.
- Brent has edged up +0.7% today to US$69.30 bbl, having traded in a tight range of $69 - $69.46.
- Longer term trends driven by over supply are likely to be ignored in the short term. With momentum indicators broadly neutral, oil prices are biased to rise on US Iran headlines and Wednesday in the US could bring further indications on the next steps in negotiations.
GOLD: Bearish Momentum Remains, Steadies Above $5,000
- Weaker than expected overnight data in the US sees gold holding above $5,000 today as investors position for rate cuts in the US.
- Gold has generally trended higher today in Asia, up +0.80% at US$5,058 - trading in a $5,026 - $5,060 range.
- Gold may climb to $6,000 an ounce by the end of the year as macroeconomic and geopolitical risks persist, according to BNP research (per BBG). This is one of the highest forecasts for gold with ranges of around $5,000 to $6,000 most prevalent.
- Gold short term momentum still remains bearish according to the MACD with the MACD (white) line below the Signal (red) line, a bearish sign.
- The volatility this month for gold seems far from over as we look ahead to non farm payrolls for a steer on US interest rates and the Trump and Netanyahu meeting on Iran.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 11/02/2026 | 0900/1000 | * |  IT | Industrial Production |
| 11/02/2026 | 1020/1120 |  EU | ECB's Cipollone In Digital Finance Conference Fireside Chat | |
| 11/02/2026 | 1200/0700 | ** |  US | MBA Weekly Applications Index |
| 11/02/2026 | - | *** |  CN | New Loans |
| 11/02/2026 | - | *** | CN | Money Supply |
| 11/02/2026 | - | *** | CN | Social Financing |
| 11/02/2026 | 1330/0830 | * |  CA | Building Permits |
| 11/02/2026 | 1330/0830 | *** | US | Employment Report |
| 11/02/2026 | 1330/0830 | *** | US | Employment Report |
| 11/02/2026 | 1330/0830 | *** | US | Employment Report |
| 11/02/2026 | 1330/0830 | *** | US | Employment Report |
| 11/02/2026 | 1330/0830 | *** | US | Employment Report |
| 11/02/2026 | 1330/0830 | *** | US | Employment Report |
| 11/02/2026 | 1330/0830 | *** | US | Employment Report |
| 11/02/2026 | 1330/0830 | ** | US | Final CES Benchmark Revision |
| 11/02/2026 | 1330/0830 | ** | US | Final CES Benchmark Revision |
| 11/02/2026 | 1510/1010 | US | Kansas City Fed's Jeff Schmid | |
| 11/02/2026 | 1515/1015 | US | Fed Vice Chair Michelle Bowman | |
| 11/02/2026 | 1530/1030 | ** | US | US DOE Petroleum Supply |
| 11/02/2026 | 1530/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 11/02/2026 | 1700/1800 | EU | ECB's Schnabel Lecture At Austrian Academy of Sciences | |
| 11/02/2026 | 1800/1300 | ** | US | US Note 10 Year Treasury Auction Result |
| 11/02/2026 | 1830/1330 | CA | Bank of Canada meeting minutes | |
| 11/02/2026 | 1900/1400 | ** | US | Treasury Budget |
| 11/02/2026 | 2100/1600 | US | Cleveland Fed's Beth Hammack | |
| 12/02/2026 | 0700/0700 | *** |  GB | UK Monthly GDP |
| 12/02/2026 | 0700/0700 | ** | GB | Trade Balance |
| 12/02/2026 | 0700/0700 | ** | GB | Index of Production |
| 12/02/2026 | 0700/0700 | ** | GB | Output in the Construction Industry |
| 12/02/2026 | 0700/0700 | ** | GB | Index of Services |
| 12/02/2026 | 0700/0700 | *** | GB | GDP First Estimate |
| 12/02/2026 | 0900/1000 | EU | ECB's Cipollone At Commissione Europa Conference |
