US
MNI US: Biden Administration Announces Sweeping Export Controls On AI-Related Tech
The US Commerce Department issued new export controls to curb China's access to AI-related tech via third countries. The new rule will create a global licensing system for advanced AI technology exports, partially, or totally, restricting US firms from exporting to non-allied or adversarial countries. The rule comes into effect in 120 days, providing President-elect Donald Trump time to assess the measures.
- Axios reports: “The Export Control Framework for AI Diffusion is the Biden administration's final swing at China's AI industry," and follows a major package of sanctions on Russia’s energy sector package on Friday. The announcements signal Biden's intent to use executive tools to pursue foreign policy objectives before Trump takes office next week.
NEWS
MNI US-RUSSIA: Kremlin: No Specific Preparations Underway For Putin-Trump Meeting
Reuters reporting comments from Kremlin spokesperson Dmitry Peskov, stating that there are “no specific preparations” underway for a meeting between Russian President Vladimir Putin and US President-elect Donald Trump, appearing to counter Trump, who said at a press conference last week: “[Putin] wants to meet, and we are setting it up”.
- Peskov said on a potential Putin-Trump meeting: “There is only an understanding of the political will – we shall watch the situation.” On conditions for a ceasefire in Ukraine, Peskov said: “The issue of security guarantees for both Ukraine and Russia is an integral part of any possible settlement of the Ukraine conflict.”
MNI US/ISRAEL: Al Arabiya-Hamas Submits Gaza Deal Response; US NSA Talks Up Ceasefire
Saudi Arabia's Al Arabiya reports that Hamas has submitted its final response to the draft Gaza ceasefire agreement without any comments. This could indicate Hamas' acceptance of the deal. Al Arabiya: "A Hamas official confirmed on Monday that talks on key issues related to a ceasefire agreement in the Gaza Strip have made progress." Israel claims that it has not received any response from Hamas.
MNI CANADA: Alberta Premier After Trump Meet-Don't Expect Exemptions From US Tariffs
Premier of the Canadian province of Alberta Danielle Smith has been talking to the media after a meeting between her and US President-elect Donald Trump at his Mar-a-Lago resort in Florida. Smith says Canada "should have prepared [for the likelihood] that tariffs are coming." Says Canada "will have to respond if there is a 25% tariff". Says she is "not expecting any exemptions from tariffs." Smith's comments come
MNI FRANCE: PM Faces Tough Task In Balancing Left & Right In 14 Jan Policy Speech
Prime Minister Francois Bayrou is scheduled to deliver his discours de politique générale (general policy speech) in the National Assembly at 1500CET on Tuesday 14 January. This will mark the first time that he offers significant detail on his plans for gov't, and is being watched closely for signs of whether he will roll back some of the pension reforms pushed through by President Emmanuel Macron in 2023.
MNI EU-RUSSIA: Ten EU Nations Call For Tougher Sanctions On Russian LNG
Bloomberg reporting that ten European Union nations are, “pushing to toughen sanctions against Russia by introducing further restrictions on natural gas and bolstering the enforcement of a price cap on oil.” According to Bloomberg, the group which includes Sweden, Ireland, Poland, Lithuania, Latvia, Estonia, Denmark, Finland, the Czech Republic and Romania, “want to prohibit imports of pipeline and liquefied natural gas to the bloc to limit the revenues that the Kremlin uses to finance the war in Ukraine.”
MNI US TSYS: Treasuries Hold Range, Focus on Upcoming PPI & CPI Inflation Data
- Treasuries held to a narrow session range Monday amid decent volumes (TYH5 over 1.5M contracts despite Japan out on extended holiday) ahead of this week's PPI and CPI inflation data on Tuesday and Wednesday respectively.
- Late session risk-on saw Tsys soften (TYH5 107-08, -4.5) while stocks climbed off lower lvls, SPX Eminis near steady, DJIA outperforming, Nasdaq weaker but well off lows, apparently reacting to chatter that an Israeli ceasefire-hostage deal may be reached by tomorrow.
- NY Fed consumer inflation expectations saw a mixed month for December, with the 1Y holding steady at 3.0%, the 3Y jumping 40bps to 3.0% and the 5Y falling 20bps to 2.7%. The 3Y measure is its highest since Nov 2023 and came amidst its highest uncertainty since May.
- Wednesday’s US CPI report headlines the weekly calendar, with Bloomberg consensus currently looking for a 0.2% M/M print for core CPI in what’s a close call with a 0.3% M/M. Indeed, our initial review of 13 unrounded analyst estimates sees these generally more detailed projections centered around 0.25% M/M for core CPI in December.
OVERNIGHT DATA
MNI US OUTLOOK/OPINION: Analysts See Close Call Between 0.2/0.3% M/M For Core CPI
Wednesday’s US CPI report headlines the weekly calendar, with Bloomberg consensus currently looking for a 0.2% M/M print for core CPI in what’s a close call with a 0.3% M/M. Indeed, our initial review of 13 unrounded analyst estimates sees these generally more detailed projections centered around 0.25% M/M for core CPI in December.
- That would be a moderation from the 0.31% M/M in November and four months oscillating between 0.28-0.31% M/M since August.
- Initial core PCE estimates meanwhile point to a softer outright print, averaging 0.21% M/M (initial range of 0.19-0.27), but directionally it's different as it would be an acceleration after a soft 0.115% M/M in Nov. Prior to that soft spot, core PCE had averaged 0.26% M/M in Sep-Oct.
- Tomorrow’s PPI report will no doubt impact core PCE tracking before a greater convergence in analyst estimates after CPI on Wednesday.
- There's a greater difference between unrounded estimates and the broader median when it comes to headline CPI tracking, however. Unrounded analyst estimates average 0.39% M/M, and whilst 20 of 48 Bloomberg estimates look for a 0.4% increase, 24 look for 0.3% and 4 look for just 0.2%, leaving an overall average of 0.33% M/M.
MNI US DATA: NY Fed 3Y Inflation Expectations Shift Higher In Mixed Report
- NY Fed consumer inflation expectations saw a mixed month for December, with the 1Y holding steady at 3.0%, the 3Y jumping 40bps to 3.0% and the 5Y falling 20bps to 2.7%.
- The 3Y measure is its highest since Nov 2023 and came amidst its highest uncertainty since May. Largest increases in inflation uncertainty were those with lowest educational attainment and lowest pay.
- The 5Y measure meanwhile fell to its lowest since March but is still a relatively new series having only started in 2022.
- Interestingly, the unchanged 1Y figure came despite gas inflation expectations falling to their lowest since Sep’22 (down 70bps to 2.0%).
- The medium term components likely received particular focus this month after Friday’s surprise jump in the preliminary U.Mich survey, with its 5-10Y measure rising 30bps to 3.3% for its highest since 2008 (but only a preliminary release that could still be revised). To this end, the rise in the 3Y series is of some note but it can be a volatile series and it keeps to recent ranges for now.
- Back to the NY Fed’s survey (in full here), the labor market details point to less churn, with the mean probability of losing a job, voluntarily leaving a job and finding a job dropping to their lowest since Jan’24, Jan’24 and Apr’21.
MARKETS SNAPSHOT
Key market levels of markets in late NY trade:
DJIA up 291.62 points (0.7%) at 42229.38
S&P E-Mini Future down 2.75 points (-0.05%) at 5863.5
Nasdaq down 123.5 points (-0.6%) at 19037.83
US 10-Yr yield is up 2.9 bps at 4.7882%
US Mar 10-Yr futures are down 3/32 at 107-9.5
EURUSD down 0.0033 (-0.32%) at 1.0212
USDJPY down 0.05 (-0.03%) at 157.68
WTI Crude Oil (front-month) up $2.27 (2.96%) at $78.84
Gold is down $28.63 (-1.06%) at $2661.15
European bourses closing levels:
EuroStoxx 50 down 23.05 points (-0.46%) at 4954.21
FTSE 100 down 24.3 points (-0.29%) at 8224.19
German DAX down 81.94 points (-0.41%) at 20132.85
French CAC 40 down 22.4 points (-0.3%) at 7408.64
US TREASURY FUTURES CLOSE
3M10Y +2.945, 45.822 (L: 39.565 / H: 47.113)
2Y10Y +1.409, 38.991 (L: 35.637 / H: 40.031)
2Y30Y +0.538, 56.885 (L: 52.763 / H: 58.59)
5Y30Y -1.383, 35.76 (L: 33.733 / H: 37.581)
Current futures levels:
Mar 2-Yr futures down 0.25/32 at 102-16.125 (L: 102-14.5 / H: 102-17.125)
Mar 5-Yr futures down 2.5/32 at 105-12.5 (L: 105-10.5 / H: 105-16.75)
Mar 10-Yr futures down 3/32 at 107-9.5 (L: 107-06 / H: 107-15.5)
Mar 30-Yr futures down 6/32 at 111-1 (L: 110-25 / H: 111-15)
Mar Ultra futures down 1/32 at 115-17 (L: 115-02 / H: 116-02)
MNI US 10YR FUTURE TECHS: (H5) Bearish Start To The Week
- RES 4: 111-20+ High 6 and the bull trigger
- RES 3: 110-25 High Dec 12
- RES 2: 109-28 50-day EMA
- RES 1: 108-26/109-06 20-day EMA / High Dec 31
- PRICE: 107-10+ @ 1430 ET Jan 13
- SUP 1: 107-06 Intraday low
- SUP 2: 107-04 Low Apr 25 ‘24 and a key support
- SUP 3: 107-00 Round number support
- SUP 4: 106-11 2.00 proj of the Oct 1 - 14 - 16 price swing
The trend condition in Treasury futures is unchanged and remains bearish. Today’s bearish start to the week, has once again, confirmed a resumption of the downtrend. Sights are on 107-04 next, a Fibonacci projection. Note too that moving average studies remain in a bear-mode position highlighting a dominant downtrend. Key short-term resistance is seen at 108-26, the 20-day EMA.
SOFR FUTURES CLOSE
Mar 25 -0.015 at 95.735
Jun 25 -0.015 at 95.820
Sep 25 -0.010 at 95.865
Dec 25 -0.005 at 95.880
Red Pack (Mar 26-Dec 26) -0.015 to -0.01
Green Pack (Mar 27-Dec 27) -0.03 to -0.015
Blue Pack (Mar 28-Dec 28) -0.035 to -0.03
Gold Pack (Mar 29-Dec 29) -0.035 to -0.025
SOFR FIXES AND PRIOR SESSION REFERENCE RATES
SOFR Benchmark Settlements:
- 1M +0.00370 to 4.30624 (-0.01289 total last wk)
- 3M +0.01497 to 4.30198 (-0.00668 total last wk)
- 6M +0.03483 to 4.27941 (+0.00263 total last wk)
- 12M +0.06645 to 4.24478 (+0.01362 total last wk)
US TSYS: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 4.30% (+0.00), volume: $2.204T
- Broad General Collateral Rate (BGCR): 4.29% (+0.01), volume: $853B
- Tri-Party General Collateral Rate (TGCR): 4.29% (+0.01), volume: $837B
- (rate, volume levels reflect prior session)
STIR: FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $102B
- Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $302B
FED Reverse Repo Operation
RRP usage inches up to $183.669B this afternoon from $178.800B on Friday. Compares to $98.356B on Friday, December 20 - the lowest level since mid-April 2021. The number of counterparties rises to 51 from 48.
MNI PIPELINE: Corporate Issuance Roundup: $13.85B to Price Monday
$13.85B to price Monday, $3B KFW, $2B CADES and others rolled to Tuesday
- Date $MM Issuer (Priced *, Launch #)
- 01/13 $2.5B #Standard Chartered $1B 4NC3 +105, $500M 4NC3 SOFR+124, $1B 11NC10 +143
- 01/13 $2B #Deere $1.25B 10Y +68, $750M 30Y +75
- 01/13 $1.75B #Rabobank $700M 3Y +40, $300M 3Y SOFR+60, $750M 8NC7 +100
- 01/13 $1.5B #CBA 5Y SOFR+69
- 01/13 $1.2B #Eastern Energy Gas $700M 10Y +105, $500M 30Y +125
- 01/13 $1B #Micron 10Y +102
- 01/13 $1B *EBRD 5.5Y SOFR+42
- 01/13 $1B #Plains All American 10Y +120
- 01/13 $650M Blue Owl Tech Fin 3Y +185
- 01/13 $500M #Apollo Debt Solutions 7Y +185
- 01/13 $750M #Ares Strategic 7Y +175
- 01/13 $Benchmark KHFC 5Y +95a, 5Y SOFR
- May price Tuesday:
- 01/13 $3B KFW +5Y +43a
- 01/14 $2B CADES 5Y SOFR+70a
- 01/13 $Benchmark British Colombia 3Y SOFR+46a
- 01/14 $Benchmark BNG Bank 5Y SOFR+50a
- 01/14 $Benchmark CAF 5Y SOFR+90a
- 01/14 $Benchmark IFC 3Y SOFR+33a
MNI BONDS: EGBs-GILTS CASH CLOSE: Gilts Underperform, Sell-Off Fades
Gilts underperformed Bunds and broader EGBs Monday, with pronounced bear flattening in the UK curve.
- Bonds remained under pressure overnight to start the week's trade, with Gilt and Bund yields nearing lastweek's multi-month and in some cases multi-year highs as the hawkish implications of Friday's solid US employment report continued to reverberate.
- The sell-off partially unwound over the course of the session, as dollar gains and equity losses consolidated with an eye on US and UK CPI Wednesday.
- The UK curve bear flattened, with Germany's bear steepening.
- Periphery EGB spreads to Bunds widened, with GGBs weakest as Greece announced a 10Y mandate likely to take place Tuesday (expectations had been it would occur next week).
- Tuesday's data calendar is largely second tier (Italian industrial production), though we get multiple central bank speakers including ECB's Lane and Holzmann, and BOE's Breeden.
- Also of note given fiscal considerations, new French PM Bayrou gives a key policy speech Tuesday afternoon.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is up 0.9bps at 2.293%, 5-Yr is up 1.7bps at 2.396%, 10-Yr is up 1.8bps at 2.613%, and 30-Yr is up 2bps at 2.81%.
- UK: The 2-Yr yield is up 6.2bps at 4.601%, 5-Yr is up 5.5bps at 4.602%, 10-Yr is up 4.7bps at 4.885%, and 30-Yr is up 3.2bps at 5.438%.
- Italian BTP spread up 3.6bps at 121bps / Greek up 4.1bps at 86bps
MNI FOREX: More Stable Equities Prompt Cross/JPY Recovery
- More stable equity markets since the European open have helped curtail the Japanese yen bid on Monday, with the push below 157.00 for USDJPY seeing a decent 60 pip reversal across the US session.
- In similar vein, the likes of EURUSD rising back above 1.02 and GBPUSD extending its bounce from the 1.21 handle have assisted a strong recovery for both EURJPY and GBPJPY.
- The trend condition in EURUSD remains bearish and recent short-term gains have proved to be a correction. The recent break of 1.0226 confirms a resumption of the downtrend and marks an extension of the price sequence of lower lows and lower highs. Sights are on 1.0138 next, a Fibonacci projection.
- For GBPJPY, early price action saw the cross briefly extend losses since Dec 30 to 4.5%, before 190.00 acted as decent support. We have seen the cross retrace the best part of 1% to levels around 191.75, despite remaining down on the session.
- Overall, the USD index is still holding on to moderate gains, with the post-NFP greenback impetus still present. The DXY printed a fresh cycle high at 110.17 before slipping back just below the 110 mark. Commodity currencies have traded with relatively contained ranges, whereas USDCHF had its first print above 0.9200 since May last year as the pair approaches key medium-term resistance at 0.9224/44.
- US PPI on Tuesday provides a warm-up for the main CPI data on Wednesday, when UK inflation data is also due.
TUESDAY DATA CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 14/01/2025 | 0735/0835 |  EU | ECB's Lane speech on Europe, Asia and the Changing Globe | |
| 14/01/2025 | 0830/0830 |  GB | BOE's Breeden speech on Financial Stability | |
| 14/01/2025 | 0900/1000 | * |  IT | Industrial Production |
| 14/01/2025 | 1000/1000 | * | GB | Index Linked Gilt Outright Auction Result |
| 14/01/2025 | 1000/1000 | * | GB | Index Linked Gilt Outright Auction Result |
| 14/01/2025 | 1100/0600 | ** |  US | NFIB Small Business Optimism Index |
| 14/01/2025 | - | *** |  CN | Money Supply |
| 14/01/2025 | - | *** | CN | Social Financing |
| 14/01/2025 | - | *** | CN | New Loans |
| 14/01/2025 | 1330/0830 | *** | US | PPI |
| 14/01/2025 | 1355/0855 | ** | US | Redbook Retail Sales Index |
| 14/01/2025 | 1500/1000 | US | Fed's Schmid | |
| 14/01/2025 | 1630/1130 | * | US | US Treasury Auction Result for Cash Management Bill |
| 15/01/2025 | 0315/0415 | EU | ECB's Lane in fireside chat at GS global macro conference |