MNI ASIA OPEN: 20Y Highs for 10Y Yld, S&P Flash PMIs Surge

EXECUTIVE SUMMARY * MNI FED: Gov Barr: Base Case Is For Further Hikes: #83aa171c-7fc4-49fd-82f5-351bcb071d96 * MNI IRAN: Security Chief Says In No Rush To Negotiate: #5df7e2ac-e490-4920-91fd-84069fe559a3 * MNI IRAN: Pezeshkian Talks On Nuclear, Hormuz & US Stance In UN Address: #c9b6854d-8cab-47cb-8646-ce411062279c * MNI GLOBAL: "SENATORS AIM TO FAST-TRACK CHINESE VEHICLE BAN LEGISLATION THIS WEEK, Reuters: #a5e456b7-6f68-4666-ae3c-07ddf225d9e2 * MNI US-RUSSIA: Rubio & Lavrov Meet As Moscow Signals No Move Toward UKR Peace Talks: #94cec5b4-8e07-48e1-9bc6-d5cba359468e * MNI US DATA: Flash PMI Activity & Input Costs Surge In Sept, Less So Selling Prices: #99304ca5-d104-45cd-8ff3-4e7bbb8e69fe Source: Charts from S&P Global US PMI press releaseUS MNI FED: Gov Barr: Base Case Is For Further Hikes: 0172893942 Gov Barr (permanent FOMC voter)'s speech Tuesday: is primarily on the longer-term outlook for the housing sector, but importantly he notes that his "base case" is for "further policy adjustments" (plural).

His outlook for multiple further hikes suggests that he is on the more hawkish end of the FOMC, given that only 4 participants at the September meeting saw two more hikes to 4.375% by end-2026 and 8 (of 18 members) with rates at 4.375% at end-2027. * Barr: "Our economy has experienced a series of shocks over the past year and half: the imposition of tariffs, the conflict in the Middle East and continued disruptions from Russia's war on Ukraine, and, more recently, a surge in investment demand to support the artificial intelligence (AI) buildout.

These shocks have contributed to upward price pressures." * "Economic growth is strong and the labor market is solid, but inflation is above our 2 percent target and not clearly trending toward target in a timely way. Moreover, risks to achieving our inflation target have increased, while risks to the labor market have receded." * "We needed to recalibrate monetary policy to reflect the balance of risks to our mandate goals. The FOMC took important action to that end last week by increasing the policy rate, which I supported.

In my view, given changes to the economy, we were out of position, and we made an adjustment in the right direction." * "In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion. We want to support sustainable, durable growth in support of maximum employment, and price stability is crucial to that." * Recall that prior to the most recent meeting, Barr wasn't quite certain on an imminent rate increase, noting raising interest rates may be necessary in September if inflation was not moderating sufficiently, but he would be open to waiting if inflation appeared to be on a path to 2%.

NEWS MNI US: Bloomberg covering an earlier reported headline from Reuters:: line-from-reuters-re-the-1790186542650Bloomberg covering an earlier reported headline from Reuters re the Politico report that the US is considering a diesel export ban being fake news. * This from Reuters: "(A report that the US is considering a 90-day ban of diesel exports in an attempt to control record fuel prices is "fake news," a White House official said on Wednesday. * -- US Energy Secretary Chris Wright said earlier in the day that such a ban would not work and could boost gasoline and jet fuel prices, but the US was discussing voluntary measures.

* -- The White House official said a report the US is considering a flat, temporary export ban was not correct." MNI GLOBAL: "SENATORS AIM TO FAST-TRACK CHINESE VEHICLE BAN LEGISLATION THIS WEEK, Reuters: ban-legislation-this-1790179418580 US/China: In the midst of the significant market moves, Treasury Secretary Bessent has recently posted on social media to confirm that Chinese Vice Premier He Lifeng and he held substantive discussions on the U.S.-China economic relationship ahead of President Trump's meeting with President Xi.

Their discussions continued to focus on securing meaningful commitments that protect American workers, farmers, and businesses while advancing U.S. economic and national security interests. MNI US-RUSSIA: Rubio & Lavrov Meet As Moscow Signals No Move Toward UKR Peace Talks: move-toward-ukr-peace-talks-1790170603505: move-toward-ukr-peace-talks-1790170603505Russia's state-run Interfax confirms that the meeting on the sidelines of the UN General Assembly in New York City between US Secretary of State Marco Rubio and Russian Foreign Minister Sergey Lavrov is underway. The meeting is the fifth between the two since 2025.

Interfax: "Lavrov previously stated that he plans to discuss, in particular, Washington's vision of the situation in Ukraine during his meeting with Rubio." * Ahead of the meeting, Kremlin spox Dmitry Peskov claimed that there remain no grounds for peace talks with Ukraine to start. Peskov: "For now, there are no prerequisites for moving onto a peaceful negotiating track, although we, as the Russian side, remain open to peace talks," * Not for the first time, Ukrainian President Volodymyr Zelenskyy talked up the prospect of trilateral talks between him, Russian President Vladimir Putin and US President Donald Trump.

As has been the case to date, Russia again shut down such a prospect, saying a bilateral Putin-Trump meeting would be possible, but that meeting with the Ukrainian leader would only be possible in Moscow. Kyiv has demanded any such summit take place in a neutral location. * At an earlier meeting between Rubio and Indian Minister for External Affairs S. Jaishankar, the Indian minister said he reiterated concerns over the Lindsey O.

Graham Sanctioning Russia and Iran Act, signed by President Trump on 18 Sep. The Act opens up the prospect of countries purchasing large quantities of Russian oil and gas being subject to US secondary sanctions. MNI IRAN: Pezeshkian Talks On Nuclear, Hormuz & US Stance In UN Address: tance-in-un-address-1790174082868 Delivering his address to the UN General Assembly plenary session in New York City, Iranian President Masoud Pezeshkian lambasts the US and Israel. Key comments below.

* Pezeshkian: "We do not seek power in order to attack or commit aggression. We seek energy for progress, not to threaten societies with weapons." * Pezeshkian: "...our defensive systems have been built so that no one can think that bombing of Iranian cities will go unanswered." * Pezeshkian on Iran's nuclear programme: "We will not bow our head and give up the right that is inherently ours. We say it clearly: no nuclear weapons and no limitations to peaceful nuclear technology." * Pezeshkian: "...we live in a region in which warfare knows no borders. Crisis in one land will spill into the surrounding nations.

That's why Iran does not see her neighbours as security rivals." * On the Strait of Hormuz: "We cannot let some have free access and gain their interest from a waterway while at the same time using that waterway to impose their aggressions upon us." * Pezeshkian: "Iran must be understood by Mr.

Trump and those who seek to bully us that we are ready for dialog and diplomacy and negotiations without accepting the language of force." * As is often the case with such addresses to the UN, Pezeshkian's (and Trump's) speech can be viewed as being intended for viewing domestically to rally hardliners, but with talks: Iranian and US officials (mediated by Qatar) taking place on the sidelines of the UNGA, there is at least behind the scenes some small move towards resuming negotiations.

MNI IRAN: Hardline Outlets Escalate FM Criticism After Officials Talk To US Envoys: r-officials-talk-to-us-envoys-1790178695007 Iran's IRGC-linked Tasnim reports: 9%85-%D8%B9%D8%B1%D8%A7%D9%82%DA%86%DB%8C-%D8%AF%D8%B1-%D8%AA%D8%B9%D8%A7%D9%85 %D9%84-%D8%A8%D8%A7-%D9%88%DB%8C%D8%AA%DA%A9%D8%A7%D9%81-%D8%A8%D8%AF%D9%88%D9% 86-%D9%87%D9%85%D8%A7%D9%87%D9%86%DA%AF%DB%8C-%D8%A8%D8%A7-%D9%86%D9%87%D8%A7%D 8%AF%D9%87%D8%A7%DB%8C-%D8%B0%DB%8C%D8%B1%D8%A8%D8%B7-%D8%A8%D9%88%D8%AF%D9%87- %D8%A7%D8%B3%D8%AAthat contacts between Iranian officials and US special envoy Steve Witkoff on the sidelines of the UNGA in New York City "took place without coordination or permission from the policy-making and responsible institutions in this field (including the Supreme National Security Council), and some claims that this action was coordinated are not true".

The article lays the blame for this at the feet of Foreign Minister Abbas Araghchi, viewed as a more moderate figure more amenable to opening talks with the US. * Tasnim: "Mohsen Rezaei, Secretary of the Supreme National Security Council, also announced in a television interview a few minutes ago that Iran's seven conditions were to be communicated again to the "intermediaries." This statement implicitly confirms that there was no authorisation to go beyond this [communication] and interact with Witkoff. Accordingly, it is essential that Mr.

Araghchi be held accountable to the relevant institutions and the Iranian nation for this wrong action, which is against national interests." * IranWire, run by Iranian-Canadian journalist Maziar Bahari, a critic of the regime, notes: ting-with-us-envoy-witkoff/that outlets linked to the IRGC and hardliners in parliament have escalated their criciticsm of Araghchi.

Fars News claimed "the meeting risked alleviating the political pressure that rising oil prices were exerting on the Donald Trump administration, questioning why contact occurred prior to Washington accepting Tehran's demands." MNI Iranian Security Head Reiterates Need To Comply With MOU: mply-with-mou-1790170581539A reiteration of the stance from the Iranian security chief via Irib: "General Rezaii: We will not return to the situation before Islamabad. "We will force the United States to earn the trust of the Iranian people.

If the United States does not comply with the seven conditions set by Iran, neither the Strait of Hormuz will be opened, nor will we engage in negotiations." MNI IRAN: Security Chief Says In No Rush To Negotiate: -1790170811752 More from Iranian security chief Rezaii via Irib: "Iran has not been in a hurry to negotiate; today, Iran's conditions have been compiled and are currently in the hands of the Qatari and Pakistani parties." MNI GLOBAL: Trump Posts on Canada: -becoming-reality-1790168923789 Donald J.

Trump: Canada is destroying itself by allowing millions and millions of people into the Country, essentially unchecked and unvetted, and who are causing problems that will soon be too big to handle. It is a Liberal takeover that will end very badly. Already showing up in their numbers. Big unemployment.

'Oh Canada! President DJT US TSYS MNI US TSYS: Yields Climb to Multi-Decade Highs, Crude Bounces, Trump Welcomes Xi: unces-trump-welcomes-xi-1790191539114 * Treasuries look to finish broadly weaker but off midday lows after yields climbed to the highest levels in 20 years Wednesday. Higher than expected S&P flash PMIs (carry over from hawkish flash PMIs for EGBs) triggered heavy selling, while doubts over US/Iran diplomatic efforts spurred crude prices higher. * TYZ6 currently -30 at 105-02 vs.

104-28 low, yield +.1466 at 5.1079% vs. 5.1329% high. Tsy futures extended lows after large 3.1bp tail - 16th consecutive for the $70B 5Y note auction (91282CRK9) drew 5.033% high yield vs. 5.032% WI; 2.21x bid-to-cover vs.

2.37x prior (2.33x 5-auction avg). * The S&P Global US PMIs were far stronger than expected in the flash September update, with manufacturing hitting a 52-month high (57.0 (cons 53.7) in Sep prelim after 53.9 in Aug) and services a 59-month high (58.7 (cons 55.8) in Sep prelim after 56.5 in Aug). Input costs also surged higher on the back of higher energy prices, less surprising considering the survey was collected 10-22 Sep, although selling price inflation was more muted and still below those seen through March-July.

* Crude oil has risen on Wednesday as earlier optimism around US-Iran diplomatic efforts has faded following more hardline rhetoric from Iranian officials WTI Nov 26 is up by 2.0% at $92.4/bbl. US Secretary of State Marco Rubio said that if there is to be a deal with Iran, it would require hard work and time and that Tuesday talks with Iran were positive but not a breakthrough. A senior Iranian official told Reuters that Tehran was reviewing a US response to its proposal to end hostilities, although many differences remain between the sides.

* Gov Barr (permanent FOMC voter)'s speech Tuesday: is primarily on the longer-term outlook for the housing sector, but importantly he notes that his "base case" is for "further policy adjustments" (plural). "In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion. We want to support sustainable, durable growth in support of maximum employment, and price stability is crucial to that." * Look ahead to Thursday: After Aussie jobs data, the focus will be on CB decisions in Sweden, Switzerland and Norway. Meanwhile, headlines emanating from the Trump-Xi summit will garner significant attention after Xi.

China bank holiday Thursday. OVERNIGHT DATA MNI US DATA: Flash PMI Activity & Input Costs Surge In Sept, Less So Selling Prices: -sept-less-so-selling-prices-1790171706692 The S&P Global US PMIs were far stronger than expected in the flash September update, with manufacturing hitting a 52-month high and services a 59-month high. Input costs also surged higher on the back of higher energy prices, less surprising considering the survey was collected 10-22 Sep, although selling price inflation was more muted and still below those seen through March-July.

* Manufacturing: 57.0 (cons 53.7) in Sep prelim after 53.9 in Aug * Services: 58.7 (cons 55.8) in Sep prelim after 56.5 in Aug * Composite: 58.4 (cons 55.3) in Sep prelim after 56.0 in Aug. Some highlights from the PMI press release (in full here: ea706be): * "US business activity growth accelerated for a fourth successive month in September to reach the fastest rate for over five years. * A further surge in service sector business activity was accompanied by a renewed improvement in manufacturing output growth. * Employment also rose sharply, with jobs added at a pace not seen for over four years, as firms sought to meet rising demand.

* However, backlogs of work continued to rise at an increased rate and supply chain delays intensified, pointing to a lack of operating capacity which fed through to higher prices. Input costs meanwhile surged higher on the back of the recent spike in energy prices, adding to a worsening inflation picture." Plus further color on price components: * "Average input costs measured across both goods and services surged higher, the overall rate of inflation hitting the highest since October 2022.

The increase was blamed widely on higher fuel and transport costs, though wage pressures were also noted to have picked up in many cases." * "Selling price inflation also picked up in September, though was muted by competition in some instances, notably in the service sector.

While above that seen in August, September's overall selling price rise was below the rates seen between March and July." MARKETS SNAPSHOT Key market levels of markets in late NY trade: DJIA down 317.82 points (-0.61%) at 51552.54 S&P E-Mini Future down 61 points (-0.78%) at 7774.5 Nasdaq down 322.4 points (-1.2%) at 26939.81 US 10-Yr yield is up 14.5 bps at 5.1059% US Dec 10-Yr futures are down 29/32 at 105-3 EURUSD down 0.0062 (-0.54%) at 1.1387 USDJPY up 0.93 (0.59%) at 158.32 Gold is down $74.06 (-1.7%) at $4286.82 European bourses closing levels: EuroStoxx 50 down 24.9 points (-0.39%) at 6299.82 FTSE 100 down 3.07 points (-0.03%) at 10705.26 German DAX down 168.22 points (-0.66%) at 25410.63 French CAC 40 down 31.5 points (-0.39%) at 8123.41 US TREASURY FUTURES CLOSE Curve update: 3M10Y +11.365, 96.925 (L: 81.704 / H: 99.795) 2Y10Y +0.712, 21.068 (L: 17.03 / H: 22.108) 2Y30Y -4.352, 49.825 (L: 44.935 / H: 53.359) 5Y30Y -6.165, 39.964 (L: 35.923 / H: 47.162) Current futures levels: Dec 2-Yr futures down 7.375/32 at 101-20.75 (L: 101-18 / H: 101-30) Dec 5-Yr futures down 20/32 at 103-19.75 (L: 103-14.25 / H: 104-13) Dec 10-Yr futures down 29/32 at 105-3 (L: 104-28 / H: 106-08.5) Dec 30-Yr futures down 50/32 at 105-30 (L: 105-22 / H: 107-31) Dec Ultra futures down 51/32 at 107-19 (L: 107-09 / H: 109-22) MNI US 10YR FUTURE TECHS: (Z6) Resumes Its Downtrend: * RES 4: 108-27+ High Aug 13 * RES 3: 108-15+ High Aug 28 * RES 2: 107-20+ 50-day EMA * RES 1: 106-12/106-24+ High Sep 14 / 20-day EMA * PRICE: 105-07+ @ 17:11 BST Sep 23 * SUP 1: 105-02+ Low Sep 23 * SUP 2: 105-00+ 2.382 proj of Jun 30 - Jul 14 - 17 price swing * SUP 3: 104-25+ 2.500 proj of Jun 30 - Jul 14 - 17 price swing * SUP 4: 104-00 Round number support Wednesday's sharp sell-off in Treasuries confirms a resumption of the downtrend and confirms a bear flag formation on the daily chart.

Note too that moving average studies are in a bear-mode position, highlighting a dominant downtrend. Support into 105-09 has given way, leaving focus on 105-00+, a Fibonacci projection point. Initial firm resistance to watch is 106-24+, the 20-day EMA. Short-term gains would be considered corrective.