MNI US OPEN - Fed Rate Cut Not Particularly Hawkish

EXECUTIVE SUMMARY

• MNI FED REVIEW: NOT A PARTICULARLY HAWKISH CUT
• SNB LEAVES RATES ON HOLD AT 0% IN DECEMBER
• ORACLE DROPS ON DISAPPOINTING CLOUD SALES, MORE AI SPENDING
• BRAZIL CENTRAL BANK STICKS WITH HAWKISH TONE, NO CUT HINTS

Figure 1: USD/INR rallies to fresh highs as trade concerns linger

Source: MNI, Bloomberg Finance L.P.

NEWS

MNI FED REVIEW: Not A Particularly Hawkish Cut

The FOMC delivered what was widely anticipated to be a “hawkish cut” at the December meeting, lowering the Funds rate range by 25bp to 3.50%-3.75% while portraying a cautious stance on further adjustments in the Statement and Dot Plot. But with most of the main communications having been well-anticipated – from the subtle shift in forward guidance in the Statement, to the unchanged Dot Plot rate forecast medians – overall the meeting outcome brought some slight dovish surprises and a concomitant market reaction.

SNB (MNI): SNB Leaves Rates on Hold at 0% in December

The Swiss National Bank left its key policy rate unchanged at 0% Thursday, adding it was prepared to be active in the forex markets if necessary. The Board said inflation in recent months "has been slightly lower than expected". In the medium term, however, inflationary pressure is virtually unchanged compared to the September monetary policy assessment. The SNB said it will continue to monitor the situation and adjust its monetary policy if necessary, in order to ensure price stability. Inflation declined slightly since the last monetary policy assessment, decreasing from 0.2% in August to 0.0% in November.

US/VENEZUELA (NYT): U.S. Steps Up Campaign Against Maduro in Seizing Tanker Off Venezuela

The United States seized an oil tanker off the coast of Venezuela on Wednesday, a dramatic escalation in President Trump’s pressure campaign against Nicolás Maduro, the leader of Venezuela. Speaking at the White House before an event on a new luxury visa program, Mr. Trump announced the operation and said it was “a large tanker, very large,” adding, without elaboration, that “other things are happening.” When asked about the ship’s oil, Mr. Trump said, “Well, we keep it, I guess.” He declined to say who owned the tanker. “It was seized for a very good reason,” he added. Three U.S. officials, who spoke on the condition of anonymity to describe a law enforcement operation, said the ship was carrying Venezuelan oil. They said there was no resistance from the crew and no casualties.

US/RUSSIA/UKRAINE (WSJ): U.S. Blueprint to Rewire Economies of Russia, Ukraine Sets Off Clash With Europe

The Trump administration in recent weeks has handed its European counterparts a series of documents, each a single page, laying out its vision for the reconstruction of Ukraine and the return of Russia to the global economy. The proposals have sparked an intense battle at the negotiating table between America and its traditional allies in Europe. The outcome stands to profoundly alter the economic map of the continent. 

US/RUSSIA/UKRAINE (MNI): Lavrov-Putin/Witkoff Meeting 'Resolved All Misunderstandings'

Russian Foreign Minister Sergey Lavrov, speaking at a meeting of ambassadors in Moscow, says Trump has "truly addressed [ending the war] and, in our assessment, is sincerely striving to help resolve the conflict through political and diplomatic means." Says that last week's meeting between President Vladimir Putin and US presidential envoy Steve Witkoff and Trump's son-in-law Jared Kushner, "resolved all misunderstandings between Russia and the United States that arose due to the pause after the Alaska summit".

GERMANY (MNI): IFO Downwardly Revises Growth Projection

The IFO Institute has revised its growth forecast for Germany downward, to 0.1% in 2025 (from 0.2%), 0.8% in 2026 (from 1.3%) and 1.1% (from 1.6%) in 2027. On the infrastructure measures planned by the government, IFO comments: "The planned government investments from the special funds for infrastructure and defense, as well as further relief for companies and consumers will only have a delayed effect. A growth effect of 0.3 percentage points is expected for 2026 and 0.7 percentage points for 2027. "The German government's measures will help in the short term but are insufficient to expand the production capacities of the German economy in the long term".

JAPAN (MNI): BOJ Dec Tankan to Show Key Sentiment Edging Up

The Bank of Japan’s December Tankan survey is expected to show a slight improvement in benchmark business sentiment from three months earlier, while capital investment plans by major firms are set to remain solid, economists predict. The results, due Dec. 15, will likely support the BOJ’s search for an opportunity to raise the policy rate next week, though the final decision will hinge on wage-hike information gathered from regional branches and hearings with major companies. The results, due Dec. 15, will likely support the BOJ’s search for an opportunity to raise the policy rate next week, though the final decision will hinge on wage-hike information gathered from regional branches and hearings with major companies.

CHINA (BBG): China Vows Flexible Rate, RRR Cuts to Boost Economy in 2026

China’s economic policymakers pledged to implement a “moderately loose” monetary policy and “more proactive” fiscal measures to bolster the economy. The leadership will “flexibly” use interest rate and reserve requirement cuts to stabilize growth, according to an official readout released Thursday following the conclusion of the Central Economic Work Conference. Attended by senior officials including President Xi Jinping, the meeting sets economic policy priorities for the coming year.

MEXICO/CHINA (MNI): Mexico Tariffs Will Harm Trade With China

MNI (Beijing) Mexico's decision to raise import tariffs by up to 50% on countries without a trade agreement with them will significantly harm the interests of partners, including China, the Chinese Ministry of Commerce said in a statement released on Thursday. The Ministry also reiterrated an investigation into trade and investment barriers imposed by Mexico was launched in late September and was currently underway. China urges Mexico to carefully consider the potential consequences of this decision and take a prudent approach moving forward, the Ministry said.

BRAZIL (MNI): Copom Sticks With Hawkish Tone, No Cut Hints

The Central Bank of Brazil did not signal a possible cut in January in its decision Wednesday and repeated that the strategy of holding rates at 15% for a "very prolonged period" remains "appropriate," maintaining a hawkish tone that included a renewed warning that it would not hesitate to hike again if necessary. "The current scenario, marked by heightened uncertainty, requires a cautious stance in monetary policy. The Committee evaluates that the present strategy of maintaining the interest rate at its current level for a very prolonged period is appropriate to ensure the convergence of inflation to the target," the BCB said after unanimously deciding to hold the official Selic rate at 15.00%..

PHILIPPINES (BBG): Philippines’ Rate Cut May Be Last in Current Easing Cycle

The Philippine central bank’s fifth consecutive cut to its benchmark interest rate on Thursday may be the last in its easing cycle that began over a year ago, with domestic demand on track to recover. The easing cycle “may have ended already. This may be the last cut,” Governor Eli Remolona said in a briefing after the Bangko Sentral ng Pilipinas reduced its overnight target reverse repurchase rate by a quarter point to 4.5%. The move was predicted by all but one of 25 economists in a Bloomberg News survey.

DATA

SWEDEN DATA (MNI): Muted Underlying Inflation Pressures Could Temper Hawkish Repricing

• SWEDEN FINAL NOV CPIF +2.3% Y/Y
• SWEDEN FINAL NOV CPIF EX-ENERGY +2.4% Y/Y

Swedish seasonally adjusted and inflation breadth metrics suggest underlying pressures are muted, which is notable given CPIF ex-energy will mechanically be pulled even lower next year due to the food VAT cut. The Riksbank will likely assume that the ongoing economic recovery will support demand-pull inflation (ex-energy and food) in 2026, keeping the overall outlook consistent with the target. However, if this fails to materialise, and below-target inflation filters into longer-term inflation expectations, it would work against recent hawkish repricing in SEK rates which now fully price a hike by the end of next year.

SWEDEN DATA (MNI): Labour Market Data Improving Alongside Activity Trends

This morning's November Public Employment Service (PES) labour market data was encouraging. It suggests the ongoing recovery in activity data is starting to be reflected in the labour market. Although muted inflation pressures may temper some of the recent hawkish repricing in SEK rates, stronger growth and labour market outcomes suggest the probability of a Riksbank hike is still greater than the probability of another cut over a 6-12-month horizon. The PES unemployment claims rate eased to an eighteen-month low of 6.73%.

AUSTRALIA DATA (MNI): Aussie Unemployment Steady, Jobs Creation Contracts

• AUSTRALIA NOV UNEMPLOYMENT RATE +4.3%
• AUSTRALIA NOV LABOR PARTICIPATION RATE +66.7%
• AUSTRALIA NOV EMPLOYED PERSONS CHANGE -21.3K

Australia’s unemployment rate held steady at 4.3% in November, coming in 10 basis points lower than expected, while employment unexpectedly fell by 21,300, against forecasts for a 20,000 gain, according to Australian Bureau of Statistics data released Thursday. Full-time employment dropped 57,000, including a fall of 40,000 among men and 16,000 among women. Part-time employment partly offset this decline, rising 35,000, driven by a 29,000 increase in female part-time workers and a 6,000 rise among men.

FOREX: USD Weakness Post ‘Not So Hawkish Cut’ Offset by Oracle Concerns

• The Dollar Index is holding onto the bulk of the post-Fed weakness, as the meeting outcome brought some slight dovish surprises and a concomitant market reaction. Notably, Chair Powell did not push back forcefully against a January cut, if anything sounding less cautionary about a follow-up cut than he sounded in October when the FOMC delivered an actual “hawkish cut”.
• After a solid bump lower yesterday, the DXY extended its 3-week pullback to 1.85%, printing a 98.54 low overnight. However, a warning from U.S. cloud computing giant Oracle about lower-than-expected profit and revenue outlooks has dented risk-sentiment, providing an offsetting bid for the greenback, which leaves the DXY close to unchanged ahead of the NY crossover.
• Alongside the softer risk tone, weaker-than-expected Australian employment data has hampered AUDUSD (-0.35%), which erased the entirety of the post-Fed advance by sinking to 0.6627 overnight. A net change of -21.3k jobs was concentrated among full time workers, however, a stable unemployment rate at 4.3% provided a silver lining to the release.
• From a near-term perspective, the AUDUSD trend is overbought, and a pullback would allow this condition to unwind. Key support to watch is at 0.6571, the 20-day EMA. AUDJPY’s pullback from the week’s high totalled 1% overnight amid the sensitivity to risk, however the cross remains comfortably above the recent 1.0240 breakout.
• Elsewhere, the Swiss National Bank kept rates unchanged, broadly maintaining their prior guidance. This has allowed yesterday’s theme of CHF outperformance to prevail, with USDCHF (-0.31%) sliding further back below the 0.8000 mark, while EURCHF extends the week’s retreat from 0.9400 to around 60 pips.

EGBS: Selloff Loses Momentum as 10-year Bund Yields Meet Resistance at 2.90%

• 10-year Bund yields were unable to push through the 2.90% figure yesterday. With the recent selloff appearing to have lost a little momentum,  some sell-side desks have issued tactical long trades overnight.
• The German curve is twist steeper, with 2-year yields down 1bp and 30-year yields up 2bps. German bonds underperform swaps across the curve.
• It’s notable that against a backdrop of recent hawkish ECB repricing, the German IFO institute significantly revised down its 2026 and 2027 GDP projections, despite the incoming domestic fiscal expansion.
• Bund futures are +3 ticks at 127.46, unwinding post-Fed strength seen overnight. Initial resistance is the Dec 8 high at 128.08, with rallies short of this level considered corrective.
• EUR swaption vol has moderated from extremes seen earlier this week, which has provided a modest narrowing impulse to 10-year EGB spreads to Bunds. The OAT/Bund spread notably lags, stuck at 71.5bps which seemingly reflects lingering political uncertainty.  3/5-year BTP supply was digested smoothly.
• This afternoon’s focus will be on US jobless claims data. 

GILTS: Curve Twist Steepens, Fed & Bunds Drive Moves

The front end of the gilt curve outperforms on spillover from the dovish Tsy reaction to the FOMC decision.

• Still, a pullback from highs in Bunds has helped limit the rally, while leaving long end yields slightly higher on the day.
• Gilt futures +18 at 91.26 vs. session highs of 91.38.
• Bears have negated much of the bullish technical theme. They now look to support layered in at 90.62/53. A break of the latter would strengthen bearish control. Meanwhile, to the upside, resistance comes in at 91.93
• Yields -2bp to +1bp, curve twist steepens.
• Month-to-date ranges comfortably intact across benchmark yields, after November lows held/went untested during the early Dec rally.
• BoE-dated OIS prices 22bp of easing for this month, with a cumulative 57bp of easing priced for the current cycle (vs. ~54bp late yesterday).
• SONIA futures flat to +3.0, with SFIZ6 & Z7 extending bounces from medium-term uptrend support drawn off the Jan lows (flagged yesterday).
• Markets have been unwilling to price less than 50bp of easing from current rate levels, limiting hawkish moves over the last 24 hours.
• Comments from BoE Governor Bailey highlight ongoing unknowns when it comes to the equilibrium level of bank reserves, while suggesting that equilibrium may be reached within the next year or so. He also pointed to the Bank’s focus on meeting demand for liquidity as reserves wind down.
• On the economic front, he affirmed that current savings rates point to a high degree of caution re: the UK economy.

EQUITIES: Eurostoxx Futures Bull Cycle Intact, Key Resistance at 5825.00

A bull cycle in Eurostoxx 50 futures remains intact and short-term weakness is considered corrective - for now. Price is trading above the 20- and 50-day EMAs, and sights are on 5742.40 next (pierced), 76.4% of the Nov 13 - 21 bear leg. A clear breach of this price point would pave the way for an extension towards 5825.00, the Nov 13 high and a key resistance. First key support to watch lies at 5632.90, the 50-day EMA. A bull cycle in S&P E-Minis remains intact and today’s pullback appears corrective - for now. Note that recent gains signal the likely end of the corrective cycle between Oct 30 and Nov 21. A resumption of gains would highlight potential for a move towards the key resistance and bull trigger at 6953.75, the Oct 30 high. Key support lies at 6525.00, the Nov 21 low. First support to watch is at 6815.09, the 20-day EMA.

• Japan's NIKKEI closed lower by 453.98 pts or -0.9% at 50148.82 and the TOPIX ended 31.78 pts lower or -0.94% at 3357.24.
• Elsewhere, in China the SHANGHAI closed lower by 27.178 pts or -0.7% at 3873.318 and the HANG SENG ended 10.27 pts lower or -0.04% at 25530.51.
• Across Europe, Germany's DAX trades lower by 19.88 pts or -0.08% at 24111.48, FTSE 100 higher by 9.64 pts or +0.1% at 9666.03, CAC 40 up 37.31 pts or +0.47% at 8060 and Euro Stoxx 50 up 6.88 pts or +0.12% at 5715.
• Dow Jones mini down 111 pts or -0.23% at 47995, S&P 500 mini down 39 pts or -0.57% at 6852.75, NASDAQ mini down 201.75 pts or -0.78% at 25596.25.

Time: 10:00 GMT

COMMODITIES: Sustained Weakness for WTI Would Expose Bear Trigger at $55.99

A bearish theme in WTI futures remains intact. Note that moving average studies are in a bear-mode position, highlighting a dominant medium-term downtrend. A stronger resumption of the bear leg would open key support and the bear trigger at $55.99, the Oct 20 low. Clearance of this level would resume the downtrend. Key short-term resistance to watch is $61.84, the Oct 24 high. Gold is in consolidation mode. The trend set-up remains bullish. The bear phase between Oct 20 and 28 appears to have been a correction and note that the recovery since Oct 28 signals the end of that corrective cycle. Key support to watch is the 50-day EMA, at $4051.3. Clearance of this EMA would signal scope for a deeper retracement. Sights are on key resistance and the bull trigger at $4381.5, the Oct 20 high.

• WTI Crude down $0.69 or -1.18% at $57.79
• Natural Gas down $0.06 or -1.37% at $4.531
• Gold spot down $10.2 or -0.24% at $4219.06
• Copper up $2.55 or +0.48% at $537.8
• Silver up $0.25 or +0.41% at $62.0718
• Platinum up $12.97 or +0.78% at $1670.71

Time: 10:00 GMT

Date	GMT/Local	Impact	Country	Event
11/12/2025	1100/0600	***	TR	Turkey Benchmark Rate
11/12/2025	-	***	CN	Money Supply
11/12/2025	-	***	CN	Social Financing
11/12/2025	-	***	CN	New Loans
11/12/2025	-		EU	ECB Lagarde and Cipollone at Eurogroup Meeting
11/12/2025	1330/0830	***	US	Jobless Claims
11/12/2025	1330/0830	**	US	WASDE Weekly Import/Export
11/12/2025	1330/0830	*	CA	Household debt-to-income
11/12/2025	1330/0830	**	CA	International Merchandise Trade (Trade Balance)
11/12/2025	1330/0830	**	US	Trade Balance
11/12/2025	1500/1000	*	US	Services Revenues
11/12/2025	1500/1000	**	US	Wholesale Trade
11/12/2025	1530/1030	**	US	Natural Gas Stocks
11/12/2025	1630/1130	*	US	US Bill 08 Week Treasury Auction Result
11/12/2025	1630/1130	**	US	US Bill 04 Week Treasury Auction Result
11/12/2025	1800/1300	***	US	US Treasury Auction Result for 30 Year Bond
12/12/2025	0430/1330	**	JP	Industrial Production
12/12/2025	0700/0700	***	GB	UK Monthly GDP
12/12/2025	0700/0800	**	SE	Unemployment
12/12/2025	0700/0700	**	GB	Trade Balance
12/12/2025	0700/0700	**	GB	Index of Services
12/12/2025	0700/0700	**	GB	Index of Production
12/12/2025	0700/0800	***	DE	Germany CPI (f)
12/12/2025	0700/0700	**	GB	Output in the Construction Industry
12/12/2025	0745/0845	***	FR	HICP (f)
12/12/2025	0800/0900	***	ES	HICP (f)
12/12/2025	0930/0930	**	GB	Bank of England/Ipsos Inflation Attitudes Survey
12/12/2025	1300/0800		US	Philly Fed's Anna Paulson
12/12/2025	-		EU	ECB de Guindos at ECOFIN Meeting
12/12/2025	1330/0830	*	CA	Building Permits
12/12/2025	1330/0830	**	CA	Wholesale Trade
12/12/2025	1330/0830		US	Cleveland Fed's Beth Hammack
12/12/2025	1535/1035		US	Chicago Fed's Austan Goolsbee
12/12/2025	1800/1300	**	US	Baker Hughes Rig Count Overview - Weekly