MNI EUROPEAN OPEN: USD Retraces ADP Losses

EXECUTIVE SUMMARY

• FED TO START GRADUAL ASSET PURCHASES WITHIN MONTHS - MNI POLICY 
• FED's BARR SAYS AI WILL TRANSFORM ECONOMIES THOUGH OUTCOMES VARY - BBG
• JAPAN'S KATAYAMA ISSUES FRESH FX WARNING AS YEN NEARS 155 LEVEL - BBG
• AUSTRALIA’S CENTRAL BANK DEBATES IF MONETARY POLICY IS RESTRICTIVE, DEPUTY GOVERNOR SAYS - RTRS 
• LOCAL ANALYSTS PROVIDE INSIGHT INTO CHINA'S 2026 CPI TRENDS - MNI 

Fig 1:  USD BBDXY Index & 10yr Tsy Yield 

Source: MNI - Market News/Bloomberg/Refinitiv. 

UK 

BOE (MNI INTERVIEW): The Bank of England this month published rate paths for different economic scenarios after long internal debate but may struggle to keep delivering them until it updates its forecasting processes, former BOE economist and Oxford Professor Michael McMahon told MNI.

POLITICS (BBC): “Allies of the prime minister are making it clear he would fight any challenge to his leadership from Labour MPs. There are fears from those loyal to Sir Keir Starmer that his job might be under immediate threat, perhaps as soon as shortly after the Budget in a fortnight's time.”

INFLATION (TIMES): “The pace of grocery inflation slowed last month as supermarkets rolled out deeper discounts to attract shoppers ahead of Rachel Reeves’s budget. Grocery price inflation stood at 4.7 per cent in the four weeks to November 2, down from 5.2 per cent the previous month, as consumers bought more products on promotion, according to Worldpanel by Numerator.”

JOBS (BBG): "The weakness in the UK labor market is likely to have been overstated, economists and policymakers warned, after new figures shifted the narrative in Westminster and financial markets ahead of the budget." 

EU

GERMANY (MNI BRIEF): Germany’s fiscal rules should be changed to ensure thE March reforms that facilitated short-term borrowing for defence and infrastructure investment do not lead to a deterioration of the public finance over the longer-term, or continue to be incompatible with EU rules, the country’s central bank said in a discussion paper published on Tuesday.

GERMANY (ECONOMIST): “The German Council of Economic Experts, a group of academics that advises the government on economic policy, will present its annual report on Wednesday. In May the council revised down its economic-growth forecast for this year: instead of weak growth it predicted stagnation. Its forthcoming report will assess the impact of increased defence and infrastructure spending on growth.”

EU/UK (POLITICO): “Brussels deadlocked over how to handle Brexit Britain. Talks will continue into Wednesday as member states remain divided over the question of U.K. payments into EU budget funds.”

US

FED (MNI POLICY): The Federal Reserve is set to restart asset purchases as soon as money market indicators and banks' liquidity management practices show reserves have transitioned to an ample level – expected within months. But in the meantime, the central bank is encouraging banks to tap its standing repo facility during bouts of illiquidity. 

FED (MNI INTERVIEW): The U.S. labor market will continue to soften and the Federal Reserve's 50 basis points of interest rate easing so far this year will not be enough to shore up hiring, private data provider Revelio Labs’ chief economist Lisa Simon told MNI.

FED (BBG): "Federal Reserve Governor Michael Barr said although artificial intelligence will transform economies, there are a range of outcomes as to how that will play out." 

OTHER

AUSTRALIA (RTRS): “A top Australian central banker said on Wednesday that there was increasing debate about whether the current cash rate of 3.6% is restrictive enough to keep inflation in check, adding that the question is critical for the policy outlook.” 

JAPAN (BBG): "Japanese Finance Minister Satsuki Katayama issued a warning regarding currency movements as the yen weakened toward the key psychological threshold of 155 to the dollar."

OIL (BBG): "The International Energy Agency further tempered its stance on an imminent peak in oil demand, reinstating a scenario in which global consumption keeps growing to the middle of the century."     

CHINA 

INFLATION (MNI): Local analysts provide insight into China's 2026 CPI trends. On MNI Policy MainWire now, for more details please contact sales@marketnews.com.

YUAN (SECURITIES DAILY): "The yuan will remain stable with limited inverse fluctuations against the U.S. dollar, supported by economic fundamentals as timely strengthening of counter-cyclical adjustments will likely offset potential export weaknesses, Securities Daily reported citing Wang Qing, analyst with Golden Credit Rating." 

GROWTH (SECURITIES DAILY): "The Chinese economy is expected to continue its steady growth trend in 2026, potentially setting an “around 5%” annual growth target, Securities Daily reported citing economists." 

PROPERTY (SHANGHAI SECURITIES NEWS): "China’s banks are listing more properties online for sale this month to accelerate disposal of non-performing assets, according to a report in the Shanghai Securities News on Wednesday. " 

MNI: PBOC Net Injects CNY130 Bln via OMO Wednesday

MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY195.5 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY130 billion after offsetting maturities of CNY65.5 billion today, according to Wind Information. 

• The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.4553% at 09:37 am local time from the close of 1.5126% on Tuesday.
• The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 50 on Tuesday, compared with the close of 49 on Monday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.

MNI: PBOC Sets Yuan Parity Lower At 7.0833 Weds; +1.67% Y/Y

MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 7.0833 on Wednesday, compared with 7.0866 set on Tuesday. The fixing was estimated at 7.1148 by Bloomberg survey today.

MARKET DATA

AUSTRALIA Q3 NUMBER OF NEW HOME LOANS +6.4% Q/Q; Q2 +2.8%
AUSTRALIA Q3 NUMBER OF INVESTOR HOME LOANS+13.6% Q/Q; Q2 +5.9%
AUSTRALIA Q3 NUMBER OF OWNER-OCCUPIED HOME LOANS +2.0% Q/Q; Q2 +0.9%

JAPAN OCT. M2 MONEY STOCK +1.6% Y/Y; SEP. +1.5%
JAPAN OCT. M3 MONEY STOCK +1.0% Y/Y; SEP. +1.0%

S.KOREA OCT UNEMPLOYMENT RATE S/ADJ 2.6%; EST. 2.6%; SEP. 2.5%
S.KOREA OCT EMPLOYED +193K Y/Y; SEP. +312K Y/Y

MARKETS

US TSYS: TYZ5 Nears Key Tech Level, Cash Yields Lower Across Curve

US treasury futures were mostly lower along with bond yields in a disjointed, post holiday market.  The 10-Yr bond future TYZ5 is down -03 at 112-30, in touch with the 20-day EMA.  A break lower could bring the 50-day EMA of 112-26+ into focus.  

Cash's morning rally moderated somewhat in the afternoon, but remains a very strong day with bond yields lower across the curve.  

• The 2-Yr is at 3.56% (-3.3bps)
• The 5-Yr is at 3.673% (-4.2bps)
• The 10-yr is at 4.083% (-3.5bps)
• The 30-Yr is at 4.683% (-2.3bps)

FED speakers dominate tonight with Williams, Paulson, Waller, Bostic, Miran and Collins all speaking throughout Wednesday, whilst economic data remains on hold.  

Investors will focus on the US$42bn 10-Yr issuance as the next guide for market demand, with markets remaining fixated on the US shutdown outcome.

JGBS: 5Y Richer Ahead Of Tomorrow's Supply, Long-End Cheaper

JGB futures are stronger and at session highs, +14 compared to settlement levels, on a data-light day.

• Cash US tsys are 2-4bps richer in today's Asia-Pac session after being closed yesterday for Veterans Day.
• Cash JGBs are 1.5bps richer (7-year) to 1.5bps cheaper (20- and 40-year) across benchmarks. The benchmark 5-year yield is 0.9bp at 1.243% versus the cycle high of 1.272% (see chart).
• Ahead of tomorrow's 5-year supply, the 2s/5s curve has steepened to near its cycle high of 32bps, last reached in late 2023.
• Regression analysis shows a strong pro-cyclical, but atypical, relationship between the 5-year yield and the 2s/5s curve over the past 12 months.
• This dynamic is supported by expectations that the 5-year sector will sit in the "sweet spot" for increased issuance, as Prime Minister Sanae Takaichi looks to deploy her first stimulus package to jump-start the economy.
• Swap rates are 1bp lower to 1bp higher, with a steepening bias.
• Tomorrow, the local calendar will see PPI and International Investment Flow data alongside 5-year supply.

Source: Bloomberg Finance LP

AUSSIE BONDS: Richer But AU-US 10Y Diff At Range Top Ahead Of Jobs Data

ACGBs (YM +1.5 & XM +2.0) are modestly stronger despite today’s much stronger-than-expected home loan data.

• The recovery in home lending began in Q2 after the RBA began easing in February and the 75bp to August appears to have contributed to the sharp rise.
• Cash ACGBs are 1-2bps richer with the AU-US 10-year yield differential at +29bps. At this level, investors may be tempted to position for a narrowing in the differential, as it sits near the top of its well-defined ±30bps trading range (see chart).
• However, such trades carry meaningful risk ahead of tomorrow’s October employment data. The unemployment rate rose 0.2pp to 4.5% in September.
• The unemployment rate is widely expected to normalise somewhat at 4.4% but there are a few economists who expect it to stay at 4.5% or fall back to 4.3%.
• Last month's weak employment data triggered a solid ACGB rally, but those gains were more than fully reversed after the much hotter-than-expected Q3 CPI report.
• RBA-dated OIS pricing is showing a 25bp rate cut in December at a 9% probability, with a cumulative 16bps of easing priced by mid-2026.
• The AOFM plans to sell A$800mn of the 1.75% 21 November 2032 bond on Friday.

Bloomberg Finance LP

BONDS: Closed Slightly Richer But Underperforms $-Bloc

NZGBs closed 1bp richer across benchmarks.

• On a relative basis, NZGBs have underperformed the $-bloc, with the NZ-US and NZ-AU 10-year yield differentials both 3bps wider at +2bps and -27bps, respectively.
• Nevertheless, the NZ-AU 10-year yield differential remains close to its lowest level since 2020. At this level, investors could be lured into taking differential reversal trades. That said, such trades carry meaningful risk ahead of tomorrow’s October employment data.  (see chart)
• Swap rates closed flat to 2bps lower, with the 2s10s curve flatter.
• RBNZ dated OIS pricing closed little changed across meetings. 28bps of easing is priced for November, with a cumulative 38bps by February 2026.
• The local calendar will see Card Spending data tomorrow.
• Tomorrow, the NZ Treasury plans to sell NZ$250mn of the 4.50% May-30 bond, NZ$150mn of the 4.25% May-34 bond and NZ$50mn of the 5.00% May-54 bond.
• The NZ Treasury has today announced the appointment of the following joint lead managers to form the panel for the syndicated tap of the 15 May 2036 nominal bond: ANZ Bank; J.P. Morgan; UBS; and Westpac.
• As previously announced, the Treasury expects to launch this transaction before calendar year-end 2025, subject to market conditions. As per usual practice, if the syndication occurs, the scheduled bond tender for that week will be cancelled.

Bloomberg Finance LP

FOREX: Asia-Pac FX: USD Retraces ADP Losses

The BBDXY has had a range today of 1217.77 - 1219.65 in the Asia-Pac session; it is currently trading around 1219, +0.15%.The USD has retraced most of its move lower from overnight in reaction to a weaker ADP print. I am caught a little undecided on the USD at the moment, I liked the fade into 1230 initially but short term I expect dips back toward 1210-1215 to now be supported first up. We could chop around sideways for a while while the market decides which way to go. Above 1230 and we could start to break higher, below 1205 and the downtrends momentum could be re-engaged. Short-term while the 12221/22 area caps price my bias would be for a test toward the 1210-1215 support, above there and the market will look back toward the 1230 area once again.

• EUR/USD -  Asian range 1.1571 - 1.1587, Asia is currently trading 1.1572. The pair continued to build on its support below 1.1500, I suspect rallies will now find sellers toward the 1.1650 area initially. This 1.1650-1.1700 area has been the pivot within the larger 1.1400-1.1900 range over the past few months. On the day a move back below 1.1530-1.1540 needed to turn lower again.
• GBP/USD - Asian range 1.3130 - 1.3164, Asia is currently dealing around 1.3130. The pair is trading sideways consolidating on a 1.31 handle. I continue to favor fading rallies though as GBP looks to have put in a medium term top. I suspect the 1.3250-1.3300 area is the place to fade if we see that level again.
• Cross asset : SPX +0.15%, Gold $4110, US 10-Year 4.08%, BBDXY 1219, Crude Oil $60.85
• Data/Events : Germany Wholesale Price Index/CPI/Current Account Balance, Italy Industrial Production,

Fig 1: EUR/USD Spot Daily Chart

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

JPY: FinMin Delivers Fresh FX Jawboning, But USD/JPY Pullback Limited So Far

USD/JPY tracks back near 154.60/65 in latest dealings. The pair hit earlier highs of 154.79, fresh highs since Feb of this year. Jawboning from FinMin Katayama has crossed a short while ago, which has helped temper the run higher in USD/JPY. Notably: "JAPAN FINMIN KATAYAMA: CLOSELY WATCHING FX MOVES WITH HIGH SENSE OF URGENCY, INCLUDING UNORDERLY, SPECULATIVE MOVES - [RTRS]"

• Katayama also stated that the disadvantages of a weaker yen are outweighing the advantages. This may be edging us closer to intervention risks, although remarks like, “We can’t tolerate speculative moves.” “We will take appropriate action if needed.” don't appear to be part of the verbal rhetoric yet. So far USD/JPY has been supported sub 154.60 on this pullback.
• Perhaps limiting USD/JPY downside so far has also been remarks from PM Takaichi, who again stated that Japan has not yet emerged from deflation and that she hopes the BoJ conducts policy which achieves the price target sustainably (i.e via wage growth).
• At face value these comments are again pushing back on fresh BoJ tightening in the near term. 

AUD: Asia-Pac: AUD/USD Drifts Lower

The AUD/USD has had a range today of 0.6520 - 0.6532 in the Asia- Pac session, it is currently trading around 0.6520, -0.10%. The AUD/USD has drifted sideways in our session consolidating its gains above 0.6500. The AUD will be one of the main beneficiaries while this positive sentiment dominates the market. The AUD/USD needs a sustained push above the 0.6550 area for the focus to turn back toward the 0.6650/0.6700 year highs. Look for intra-day dips toward 0.6480-0.6500 to be supported if this move higher is to come to fruition.

• MNI AU - Strong Home Lending May Contribute To Extended RBA Hold. The RBA noted this month that “the housing market is continuing to strengthen, a sign that recent interest rate reductions are having an effect”. The lending data is consistent with this and likely to add to its caution about easing further.
• Hauser Says RBA Debating Current Policy Stance - Per RTRS: Headlines have crossed from an Rtrs interview with RBA Deputy Governor Hauser. Rtrs notes: "A top Australian central banker said on Wednesday that there was increasing debate about whether the current cash rate of 3.6% is restrictive enough to keep inflation in check, adding that the question is critical for the policy outlook."
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6500(AUD1.37b), 0.6530(AUD 939m). Upcoming Close Strikes : 0.6520(AUD852m Nov 13), 0.6750(AUD2.17b Nov 14) - BBG

Fig 1: AUD/USD spot Daily Chart

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

NZD: Asia-Pac: NZD/USD Drifts Back Toward 0.5650

The NZD/USD had a range today of 0.5648 - 0.5660 in the Asia-Pac session, going into the London open trading around 0.5650, -0.10%. The NZD has given back most of its overnight gains. The NZD does stand out as a vehicle to express a short in but should this bout of improved risk sentiment grow it will be tough for the NZD to ignore it and it could play catch up to the move at some point, if you feel this bounce in risk will fail and move back lower then the NZD remains a great way to express that. I still suspect any decent bounce will again attract sellers though. The first sell area on a pullback would be around 0.5750 and then the more pivotal 0.5850 area. Dips on the day toward 0.5630-40 needs to hold for the short-term retracement to potentially extend, through here and the focus returns back to making new lows.

• "GOLDMAN PUSHES BACK ITS CHINA RATE CUT FORECASTS BY ONE QUARTER, GOLDMAN NOW SEES CHINA DELIVER CUTS TO POLICY RATE, RRR IN 1Q" - BBG
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.5600(NZD538m), 0.5800(NZD461m). Upcoming Close Strikes : 0.5380(NZD460m Nov 13) - BBG

Fig 1: NZD/USD Spot Daily Chart

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

ASIA STOCKS: KOSPI Up on Government Comments; Shenzhen Through Key Tech Level

In signs that consumer sentiment could be trending in the right direction, JD.Com said it's sales hit records during this year's singles days, with a 40% increase in shoppers during China's massive annual online shopping day.  In Japan, SONY rallied for a second day after yesterday's results as several key brokers increased their price target, despite the NIKKEI falling as profit taking on tech stocks dominated.  The KOSPI rose again as the President called for further incentives for long term investment in stocks by retail investors.  

• The NIKKEI fell -0.30% and with successive falls following recent highs, is now over 3% below.  
• The KOSPI is approaching the recent new high today up +0.65% to 4,133.
• China's bourses were mixed with the Hang Seng leading gains of +0.63% whilst onshore bourses all fell with the biggest losses coming from Shenzhen as it neared 1% down.  The losses sees the Shenzhen Composite at 2,493 and trade below the 20-day EMA of 2,500 with the 50-day EMA below at 2,449.

•  Last week's falls for the NIFTY 50 seem a memory as it opens strongly for a third day.  Up +0.40% in morning trade pushes India's key bourse up over 1% for the week so far as President Trump said he is getting close to a trade deal with India.  
• South East Asia's major bourses are going in different directions with the FTSE Malay KLCI down -0.22%, the Jakarta Composite up +0.45% whilst the SE Thai dipped back below 1,300 to 1,294

OIL: Crude Holds Most Of Tuesday’s Gains Ahead Of Key Reports

After rising around 1.5% on Tuesday, crude is slightly lower on Wednesday as the market waits for key information released later. WTI is down 0.3% to $60.84, holding above $60 through the session, while Brent is 0.3% lower at $64.99 after falling to $64.90. The USD index is up 0.1%.

• The excess oil supply driven by increased OPEC and non-OPEC output remains in focus with the spread between the WTI December-January contracts only 4c, suggesting an expected easier market. The EIA short-term outlook, IEA annual report and OPEC monthly report are published Wednesday. As well as US industry-reported inventory data.
• While expected excess supply has pressured oil prices, the market remains unsure over the impact of the latest sanctions on Russia. There has already been an increase in diesel prices and signs that India is looking for sources that are not Lukoil or Rosneft. Also, Russia’s Lukoil’s West Qurna 2 field in Iraq has been transferred to state firms to ensure production continues, according to Bloomberg.
• Our US analysts believe that the post-shutdown data schedule should be published next week with a risk that October CPI won’t be released. See their FAQ here.
• Later the Fed’s Barr, Williams, Paulson, Waller, Bostic, Miran and Collins speak as well as the ECB’s Schnabel and de Guindos. The Eurogroup meeting is taking place. There are no data of note.

GOLD: Pause In Latest Rally, Range Of Fed Speakers Later Today

Gold reached a high of $4145.50/oz early in today’s APAC session but was then pressured by the strengthening of the US dollar (BBDXY +0.1%) and higher US equity futures (S&P e-mini +0.1%) after several days of gains. Bullion is now down 0.4% to $4108.7, after an intraday low at $4103.75. The market is watching US developments closely with a vote in the House of Reps to end the government shutdown due on Wednesday. How the delayed data print will impact the outlook for the Fed.

• The market is waiting for more information with around 17bp of easing priced in for the 10 December FOMC meeting and a full cut by January. Fed comments since the last decision have added uncertainty. There is a range of members speaking today. ADP data on Tuesday signalled labour market weakness.
• Our US analysts believe that the post-shutdown data schedule should be published next week with a risk that October CPI won’t be released. See their FAQ here.
• Silver is down 0.3% to $51.07 after falling to $50.873.
• Equities are mixed with the CSI 300 down 0.4% but the KOSPI up 0.7%. Oil prices are lower with WTI -0.3% to $60.85/bbl. Copper is down 0.3%.
• Later the Fed’s Barr, Williams, Paulson, Waller, Bostic, Miran and Collins speak as well as the ECB’s Schnabel and de Guindos. The Eurogroup meeting is taking place. There are no data of note.

UP TODAY (TIMES GMT/LOCAL) 

Date	GMT/Local	Impact	Country	Event
12/11/2025	0700/0800	***	DE	Germany CPI (f)
12/11/2025	0700/0800	***	DE	Germany CPI (f)
12/11/2025	0900/1000	*	IT	Industrial Production
12/11/2025	1000/1000	**	GB	Gilt Outright Auction Result
12/11/2025	1045/1145		EU	ECB Schnabel Speech at BNP Paribas
12/11/2025	1140/1240		EU	ECB de Guindos at FIBI International Banking Conference
12/11/2025	1200/0700	**	US	MBA Weekly Applications Index
12/11/2025	1205/1205		GB	BOE Pill in Panel at International Monetary Research Conference
12/11/2025	-	***	CN	Money Supply
12/11/2025	-	***	CN	New Loans
12/11/2025	-	***	CN	Social Financing
12/11/2025	-		EU	ECB Lagarde, Cipollone at Eurogroup Meeting in Brussels
12/11/2025	-		GB	BOE MPG Meeting
12/11/2025	1330/0830	*	CA	Building Permits
12/11/2025	1420/0920		US	New York Fed's John Williams
12/11/2025	1500/1000		US	Philly Fed's Anna Paulson
12/11/2025	1505/1005		US	Kansas City Fed's Jeff Schmid
12/11/2025	1520/1020		US	Fed Governor Chris Waller
12/11/2025	1730/1230		US	Fed Governor Stephen Miran
12/11/2025	1800/1300	**	US	US Note 10 Year Treasury Auction Result
12/11/2025	1830/1330		CA	Bank of Canada meeting minutes
12/11/2025	2050/1550		US	New York Fed's Roberto Perli
12/11/2025	2100/1600		US	Boston Fed's Susan Collins
13/11/2025	0030/1130	***	AU	Labor Force Survey
13/11/2025	0700/0700	***	GB	UK Monthly GDP
13/11/2025	0700/0800	***	SE	Final Inflation Report
13/11/2025	0700/0700	**	GB	Trade Balance
13/11/2025	0700/0700	**	GB	Index of Services
13/11/2025	0700/0700	**	GB	Index of Production
13/11/2025	0700/0700	**	GB	Output in the Construction Industry
13/11/2025	0700/0700	***	GB	GDP First Estimate
13/11/2025	0700/0800	***	SE	Final Inflation Report
13/11/2025	0730/0730		GB	BOE MPG Minutes Released
13/11/2025	0930/0930		GB	Productivity Flash Estimates
13/11/2025	1000/1100	**	EU	EZ Industrial Production
13/11/2025	1200/1200		GB	BOE Greene in Panel on Central Bank Independence
13/11/2025	-		EU	ECB de Guindos at ECOFIN Meeting in Brussels
13/11/2025	1300/1400		EU	ECB Elderson Moderates Climate and Banks Panel
13/11/2025	1300/0800		US	San Francisco Fed's Mary Daly
13/11/2025	1330/0830	***	US	Jobless Claims
13/11/2025	1330/0830	**	US	WASDE Weekly Import/Export
13/11/2025	1330/0830	***	US	CPI
13/11/2025	1330/0830	***	US	CPI
13/11/2025	1330/0830	***	US	CPI