Highlights:
- Bessent nomination met with USD sales, equity gains
- Treasury Sec nominee seen taking a more gradual approach on tariffs, trade
- ECB speak dominates the schedule, with a focus on language at the December meeting
- Treasuries have kept to reasonably narrow ranges since opening firmer and flatter in reaction to President-elect Trump picking Scott Bessent as Treasury Secretary.
- Cash yields are 2.5bps (2s) to 6bps (30s) lower. 10Y yields of 4.353% sit almost 15bp below mid-Nov recent highs of 4.501%.
- 2s10s is at 0.3bps (-2.6bps) having earlier tilted back into inversion for the first time since Oct 7 with a low of -1.0bps.
- TYZ4 trades at 109-30+ close to session lows although is still +10 on the day. It’s earlier high of 110-05 probed resistance at 110-04+ (20-day EMA).
- Firmer clearance would open 111-09 (50-day EMA) but the bear cycle is seen remaining in play with support at 108-30 (1.236 proj of Oct 1-10-16 swing).
- Data: Chicago Fed national activity Oct (0830ET), Dallas Fed mfg Nov (1030ET)
- Note/bond issuance: US to sell $69bn of 2Y notes – 91282CLY5 (1300ET)
- Bill issuance: US to sell $81bn 13-w bills and $72bn 26-w bills (1130ET), US to sell $40bn 30-day CMB (1300ET)
STIR: Mid-2025 Fed Rates Off Friday’s Cycle Highs
- Fed Funds implied rates sit lower today, flattening as they echo the broader rally in Treasuries seen with President-elect Trump picking Scott Bessent as Treasury Secretary.
- The Dec rate is 1bp lower from Friday’s close whilst the Jun’25 is 2.5bp lower, although the latter still only prices 50bp of cuts after the implied rate closed at fresh cycle highs on Friday.
- Cumulative cuts from 4.58% effective: 14bp Dec, 20bp Jan, 33bp Mar and 50bp June.
- There is no Fedspeak scheduled for today. Tomorrow’s FOMC minutes are one day earlier than usual in the holiday-shortened week.
US TSY FUTURES: CFTC COT Shows Hedge Fund & Asset M'ger Cover In Most Contracts
The latest CFTC CoT report pointed to slightly more prominent cover of existing positions for both asset managers and hedge funds (in net curve-wide DV01 equivalent terms).
- Asset managers covered longs in TU, TY, US & WN futures, while they added to longs in FV & UXY futures. They remain net long across all contracts.
- Hedge funds covered shorts in TU, FV, TY & WN futures, while they added to shorts in UXY & US futures.
- Broader net non-commercial futures positioning in FV futures hit fresh all-time extreme short levels.
Source: MNI - Market News/CFTC/Bloomberg
CFTC: AUD Positioning Remarkably Resilient
- AUD positioning remains remarkably resilient, despite the near-term vol in spot. The AUD net position held at a net long of 17.4% of open interest, within range of the 52w high, pressing the Z-score to +1.87 and the higehst among all currencies surveyed.
- Conversely, EUR positioning swung to a small net short, reflecting the pullback in spot over the survey period - although spot losses were greater in both the week prior, and the four sessions following, Friday's update. The outright net futures position of -42,557 is close to the post-COVID largest net short levels and, while not yet at extreme levels, may expose markets to a spur of short-covering and a near-term bounce.
- Meanwhile markets trimmed the net long GBP and MZN , built shorts in EUR, NZD and CHF, while covering shorts in JPY. Full update here:
FOREX: Markets Sell USD on the Back of Bessent Nod
- Markets sold the dollar to begin the week, with the appointment of Scott Bessent as Treasury Secretary under Trump providing some relief to markets. His nomination has pinned back concerns that a tariff regime will go too far, too fast, with his views on gradualism likely meaning a more forceful approach on trade will come step-by-step, rather than an abrupt shift.
- The USD pullback has helped spur short-covering across EUR, which outperforms all others in G10. EUR/USD is testing 1.05, marking a ~160 pip recovery off last week's pullback lows.
- German IFO data painted a poor picture of the German economy, The print mirrored last week's flash PMI release in that the services sector saw a clear decline - however, in the IFO, also manufacturing went weaker again. Overall, the print underpins the narrative of ongoing weakness in the German economy. The EUR's resilience to the soft data may suggest much of the economic bad news and likely policy response from the ECB is becoming priced in - which should increase the importance of 1.0335 support ahead.
- With German IFO data cleared, focus shifts to the central bank speaker slate, as appearances are due from ECB's Centeno, Lane, Nagel and Makhlouf.
OPTIONS: Busier Monday Pipeline, Expiries Clustered Ahead of Thanksgiving
- With the week shortened by US holidays from Thursday, the expiry slate is more heavily concentrated toward the first half of the week - making Monday's pipeline busier than you'd usually see.
- EUR/USD spot is pinned between two of the largest expiries of the week, with €2.7bln rolling off at $1.0425-40 and €1.7bln at $1.0485-90
- USD/JPY trades well south of the nearest strike, with the closest option of note at Y156.50($763mln)
- €580mln rolls off in EUR/GBP at 0.8295-00 today, a level that's continued to hold and act as longer-term range-defining support - and could draw focus on any weakness in the price today.
EQUITIES: E-Mini S&P Starts the Week on a Bullish Note, Extends Recent Recovery
- A bearish theme in the Eurostoxx 50 futures contract remains intact and short-term gains are considered corrective - for now. A fresh cycle low last week marked a resumption of the downtrend that started Sep 30. Price has breached 4746.94, 61.8% of the Aug 5 - Sep 30 bull cycle. This exposes 4662.12, the 76.4% retracement point. Initial firm resistance has been defined at 4961.00, the Nov 6 high, where a break would highlight a reversal.
- S&P E-Minis have started the week on a bullish note, extending the recovery from last Tuesday’s 5855.00 low. Recent weakness appears to have been a correction. Medium-term trend signals such as moving average studies, continue to highlight a dominant uptrend. Sights are on the bull trigger at 6053.25, the Nov 11 high. A break would resume the uptrend. On the downside, key short-term support to watch is 5849.44, the 50-day EMA.
COMMODITIES: Bearish Theme in WTI Futures Intact Despite Last Week's Gains
- WTI futures traded higher last week. However, a bearish theme remains intact and attention is on $65.74, the Oct 1 low, and $63.90, the Sep 10 low and key support. For bulls, a stronger reversal to the upside would instead refocus attention on the key short-term resistance at $77.04, the Oct 8 high. Clearance of this level would resume the recent uptrend. Initial firm resistance to watch is unchanged at $72.41, the Nov 7 high.
- The long-term trend condition in Gold is unchanged, it remains bullish and the Oct 31 - Nov 14 bear leg appears to have been a correction. Price has recovered from its recent lows and today’s move lower is considered corrective - for now. A resumption of gains would open $2730.4, a Fibonacci retracement. Initial support is at $2639.7, the 50-day EMA. A clear break of the average would highlight a bearish threat.
| Date | GMT/Local | Impact | Country | Event |
| 25/11/2024 | 1330/0830 | * |  CA | Quarterly financial statistics for enterprises |
| 25/11/2024 | 1400/1500 | ** |  BE | BNB Business Sentiment |
| 25/11/2024 | 1530/1030 | ** |  US | Dallas Fed manufacturing survey |
| 25/11/2024 | 1630/1730 |  EU | ECB's Lane at BoE Watchers' Conference | |
| 25/11/2024 | 1630/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
| 25/11/2024 | 1630/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
| 25/11/2024 | 1800/1300 | * | US | US Treasury Auction Result for Cash Management Bill |
| 25/11/2024 | 1800/1300 | * | US | US Treasury Auction Result for 2 Year Note |
| 26/11/2024 | 0001/0001 | * |  GB | BRC Monthly Shop Price Index |
| 26/11/2024 | 0700/0800 | ** |  SE | PPI |
| 26/11/2024 | 1100/1100 | ** | GB | CBI Distributive Trades |
| 26/11/2024 | 1305/0805 | CA | BOC Deputy Mendes speech in PEI. | |
| 26/11/2024 | 1330/0830 | ** | US | Philadelphia Fed Nonmanufacturing Index |
| 26/11/2024 | 1355/0855 | ** | US | Redbook Retail Sales Index |
| 26/11/2024 | 1400/0900 | ** | US | S&P Case-Shiller Home Price Index |
| 26/11/2024 | 1400/0900 | ** | US | FHFA Home Price Index |
| 26/11/2024 | 1400/0900 | ** | US | FHFA Home Price Index |
| 26/11/2024 | 1400/0900 | ** | US | FHFA Quarterly Price Index |
| 26/11/2024 | 1400/0900 | ** | US | FHFA Quarterly Price Index |
| 26/11/2024 | 1500/1000 | *** | US | New Home Sales |
| 26/11/2024 | 1500/1000 | *** | US | Conference Board Consumer Confidence |
| 26/11/2024 | 1500/1000 | ** | US | Richmond Fed Survey |
| 26/11/2024 | 1500/1500 | GB | BOE's Pill at Economic Affairs Committee | |
| 26/11/2024 | 1530/1030 | ** | US | Dallas Fed Services Survey |
| 26/11/2024 | 1630/1130 | * | US | US Treasury Auction Result for Cash Management Bill |
| 26/11/2024 | 1630/1130 | ** | US | US Treasury Auction Result for 52 Week Bill |
| 26/11/2024 | 1800/1300 | * | US | US Treasury Auction Result for 5 Year Note |
| 26/11/2024 | 1800/1300 | ** | US | US Treasury Auction Result for 2 Year Floating Rate Note |
| 26/11/2024 | 1900/1400 | *** | US | FOMC Minutes |
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