AUSTRALIA: Housing Data Suggest Correction Has Further To Run

TY1 is trading at 104-28, up approximately 10+ from the prior session's closing level, reflecting a modest bid in US tsys during the Asia-Pacific session. 

• The move is consistent with a mild risk-off tone across Asian equity markets, with Japanese, Hong Kong and South Korean equity futures pointing lower at the open.
• Cash bonds are 2-5bps richer, with the 10-year leading. The US cash Treasury market was closed on Monday for a public holiday.
• IMF maintains US 2026 growth at 2.3%, lifts euro area to 1.1% on German, Italian and Spanish resilience, and upgrades India to 7.0% on strong domestic demand. China growth is trimmed to 4.5% in 2026 and 4.0% in 2027. Global inflation is forecast to rise to 4.7% in 2026 before easing to 4.1% in 2027.  – RTRS
• The dominant FOMC voice heading into the Asia-Pacific session was Cleveland Fed President Beth Hammack, who spoke at the NABE annual meeting on Monday. Hammack stated that "smaller, more frequent adjustments" to policy are preferable to waiting and risking a larger course correction, though she stopped short of explicitly backing a rate increase at the October meeting.
• Scheduled speakers on Tuesday are Boston Fed President Susan Collins, Richmond Fed President Thomas Barkin, Chicago Fed President Austan Goolsbee, and Fed Governor Christopher Waller.

Bloomberg Finance LP

The BBDXY has had a range today of 1225.94 - 1227.30 in the Asia-Pac session; it is currently trading around 1226. The US Dollar's rebound higher seems to be pausing for a breath just ahead of 1230. This area has proven to be well supplied over the last 1.5 years and the price action suggests it will take some work to sustain a move above there at the first time of asking. I can't see this giving way before the US CPI print but I would still be skewed toward fading a dip if given the opportunity. The initial support is toward 1219-1222 and then the 1212-1216 area looking for the break to consolidate and then build momentum higher at some point to re-challenge the pivotal 1230 area again. A sustained push above 1230 is needed to see another wave of potential US Dollar buying.   

• EUR/USD -  Asian range 1.1154-1.1178, Asia is currently trading 1.1173. The pair has found some decent demand back toward the 1.1150 area in the last week or so after a decent move lower. I have been skewed in favour of running a short in the EUR, the price action has turned decidedly bearish and I suspect rallies are now likely to continue to be sold into, though could we see better levels ? On the day the first resistance is back toward 1.1220-1.1250 through here the 1.1325-1.1375 area comes back into play. I would be looking for opportunities to fade looking for a move back toward 1.0900-1.1000 at some point down the line.   
• GBP/USD - Asian range 1.3205-1.3222, Asia is currently dealing around 1.3220. The pair has found demand return toward the 1.3150 area. I would still be skewed toward fading a rally but we could see better levels to fade before testing 1.3100-1.3150 again. First resistance is back toward 1.3285-1.3315 and then the 1.3400 area comes back into play.
• Data: Germany September CPI, US September Existing Home Sales, New Zealand August Net Migration

Fig 1: USD(BBDXY) Spot Weekly Chart

Source: MNI - Market News/Bloomberg Finance L.P

The NZD/USD had a range today of 0.5580-0.5595 in the Asia-Pac session; it is currently trading around 0.5593, +0.10%. Like the AUD it was unable to really build any real momentum below 0.5600 today even with the risk-off back drop. There has been some decent demand toward the 0.5500 area since 2020 and it would take a strong push below there to see the bears look for another sustained leg lower. While below 0.5700-0.5750 the trend still remains lower albeit a little stretched. Initial resistance is toward 0.5610-0.5640 and above there the 0.5700-0.5750 area comes back into play. Can we see another test of the lows or does this inability to move lower suggest a potential reversion back to the mean that would offer better levels ?   

• “The IMF expects global growth to accelerate next year, boosted by AI investment, even as it warned that the world economy is nearing the limits of its resilience in the face of persistent energy squeeze and financial risks.” - BBG
• “Fatal attacks at Saudi airports have intensified pressure on the US to help its ally. A Houthi official warned Washington of a “swift and painful response” if it enters the Yemen conflict, AFP reported.” - BBG 
• CFTC Data up to 06/10/2026 shows Asset Managers are quickly rebuilding their core shorts, -32 534(Last -21 228). The Leveraged community remains sidelined after being squeezed out of its shorts, -1 214(Last -1 454) and are not being so quick to jump back in.
• Options : Closest significant option expiries for NY cut, based on DTCC data:  0.5760(NZD386m), 0.5775(NZD382m). Upcoming Close Strikes : 0.5565(NZD350m Oct 15), 0.5790(NZD466m Oct 15) - BBG
• The NZD/USD Average True Range for the last 10 Trading days: 38 Points

Fig 1: NZD/USD Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P