Liquidity Watch: Former NY Fed repo expert (and current BofA strategist) Mark Cabana is forecasting that in addition to a 25bps rate cut, the Fed will announce (at Wednesday’s FOMC meeting) Reserve Management Purchases (RMP’s) of $45B per month beginning January to maintain bank reserves “at or above” the level of reserves that prevailed prior to the recent episode of repo pressure.
Total Chinese exports climbed 5.9% y/y in November, significantly higher than the 3.8% Reuters consensus. November exports to the U.S. plunged 28.6% (8th straight month of double-digit declines), while exports to Australia surged 35.8%, EU +14.8%, ASEAN +8.2%, Japan +4.3%, and South Korea +1.9%. China’s global trade surplus for the first 11 months of ‘25 now totals $1.08T, a record high for any prior single year ($992B in ’24).
National Energy Dominance Council Exec. Dir. Jarrod Agen telegraphed the U.S. government plans to invest taxpayer dollars into additional equity stakes in critical minerals companies. So far, the Trump administration has spent over $1B to take stakes in Vulcan Elements ($670M), MP Materials ($400M), Trilogy Metals ($35.6M) and Lithium Americas (undisclosed).
The global bond market selloff continues, with the 30-year German Bund yield touching 3.458% this morning (highest since 2011).
China’s PBOC added to its gold reserves for the 13th consecutive month in November, adding 30,000 ounces to bring its total to 74.12M ounces.
Fed funds futures are pricing a 99.6% probability of a 25bps rate cut at the FOMC’s 12/10 meeting as well as 55bps of additional cuts in ’26.
Fed rate decision Wednesday @ 2pm. European bonds ticking lower by 3bps-5bps across the board. 10-year Treasury yield +1.6bps (4.151%). DXY dollar index flat, spot gold +0.3% and spot silver +0.15%.
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