MNI China Daily Summary: Monday, November 25

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MNI: PBOC Sets Yuan Parity Lower At 7.1918 Mon; -1.35% Y/Y

CHINA PRESS: Yuan To Reach 17% Of Global Payments By 2035

EZ/UK Bond Supply Calendar: Gilt Syndi; IT, DE Due on Tuesday

MNI: GERMANY NOV IFO BUSINESS CLIMATE INDEX 85.7

EZ/UK T-Bill Calendar: Germany, France Auction on Monday

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

MNI EXCLUSIVE: German Turmoil Dashes EU's Joint-Funding Hopes -Officials

FED: Powell's Time Looks Up, Replacement Could Be Less Willing To Cut Rates?

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Post-LIBOR Settle Update: Forward Hike Pricing Moderates

US EURODLR FUTURES
Lead quarterly EDU2 pared gain slightly to 96.680 (+0.005) after latest 3M LIBOR set' new 3Y high of 2.45514% (+0.13014 total last wk).
  • Forward Fed hike expectations moderating somewhat this morning after last Fri's strong jobs gain for Jun (+372) saw 10YY climb back to 3.099%; balance of Whites through Reds (EDZ2-EDM4) trade +0.045-0.065; Greens through Golds (EDU4-EDM7) +0.050-0.030 w/ Blues-Golds lagging.
  • Front end inversion continues but easing off last Wed's lvls: Dec'22/Mar'23 currently -0.055 vs. -0.125 last wk. Most inverted calendar spd: EDH3/EDH4 at -0.680 vs. -0.715. Inversion moderation moving forward, currently start of Greens w/ EDU4/EDZ4 trading steady (97.095).
  • Friday's FI option flow centered on wing options with better downside (rate hike) insurance buying via puts as markets adjusted to the stronger than expected June employment report +372k vs. +268k est underscored the likelihood of a 75bp hike at the end of the month.
  • Despite the sharp post-data sell-off in underlying futures, overall volumes remain light, even in futures (TYU2<1.2M at the close) with traders close to the sidelines in early summer trade.
  • Some trade highlights included a block buy of 7,500 FVU 111.25 puts at 54, 5,000 FVQ 110/110.5/111/111.5 put condors and 10,000 TYQ 114/115 put spds at 3. Late Eurodollar options blocks included a buy of 10,000 Jul 96.50/96.75 put spds at 9.0, 10,000 July 96.56/96.75 put spds at 8.0 and 20,000 Dec 97.00/97.50 put spds at 43.5. On the flipside, paper bought 20,000 Red Sep'23 99.00 calls at 9.0 ref 96.555, adding to +40k on Thursday.
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