MNI US MARKETS ANALYSIS: USD & Tsys Consolidate Ahead Of PCE

Highlights:

• Tsys flat & USD consolidates bulk of recent gains into PCE.
• NZDUSD at 5-month lows, set for weekly close below pivot.
• Canadian GDP & Fedspeak add to scheduled event risk.

US TSYS: Yields Creep Higher Ahead Core PCE, UofM Sentiment/Inflation Exps

Treasuries are drifting in mildly weaker territory for the most part, 2s slightly higher, with scheduled data at a more moderate pace this morning after Thursday's heavy schedule.

• The Dec'25 10Y contract (TYZ5) currently trades at 112-09 (-1.5) on decent cumulative volumes of 285k. 10Y yield at 4.1775% (+.0077). Curves narrowly mixed: 2s10s +.165 at 51.410, 5s30s -.302 at 98.314.
• Treasury futures have traded lower this week and remain in retracement mode. Thursday’s sell-off has resulted in a print below the 50-day EMA, at 112-10. A clear break of this average would undermine a bull theme and signal scope for a deeper retracement. This would open 111-13+, the Aug 18 low and the next key support. Initial resistance to watch is 113-00, the Sep 24 high.
• Economic Data: Personal Income & Spending (0830ET), PCE/Core PCE Price Index (0830ET), University of Michigan Sentiment & Inflation Expectations (1000ET), while Kansas City Fed Services Activity wraps up the week at 1100ET.
• Fedspeak: Richmond Fed Barkin outlook, moderated discussion (0900ET), Fed VC Bowman moderated Q&A on policy (1300ET).
• Politics: President Trump's schedule includes several open press opportunities for Q&A as he departs for Ryder Cup at Bethpage NY appr 0950ET, through his return to the White House at 1655ET.

US TSY FUTURES: Mix Of Positioning Swings Seen On Thursday

OI data points to a mix of net short setting (TU, TY, UXY), long cover (FV & US) & long setting (WN) as Tsy futures twist flattened on Thursday.

• The biggest net positioning shift seemingly came via the net short setting in TY futures (~$2.5mln DV01 equivalent)

SOFR: Net Long Cover In The Reds Most Prominent On Thursday

OI data points to a mix of net short setting and long cover as SOFR futures sold off in the wake of yesterday’s GDP, weekly jobless claims and durable goods data.

• Net long cover in the reds provided the most prominent positioning swing, as the recent hawkish move extended further.

EUROPEAN ISSUANCE UPDATE

Italy auction results

• E4bln of the 2.85% Feb-31 BTP. Avg yield 2.94% (bid-to-cover 1.52x).
• E2bln of the 3.60% Oct-35 BTP. Avg yield 3.62% (bid-to-cover 1.71x).
• E1.25bln of the 4.00% Apr-35 BTP Green. Avg yield 3.46% (bid-to-cover 1.77x).
• E1.5bln of the 1.05% Apr-34 CCTeu. Avg yield 3.16% (bid-to-cover 1.92x).

FOREX: DXY Consolidating Bullish Advance, USDJPY Eyes 150.00

Although the USD index has eased off its recovery highs made Thursday, the DXY is broadly consolidating the impressive advance following the stronger set of US data on Thursday, boosting the post-Fed recovery to around 2.5%. The technical breach of the 50-day EMA for the index is a positive development, placing extra focus on upcoming US data releases and in particular next week’s US employment report.

• Intra-day ranges across the G10 have remained contained on Friday, allowing both GBP and NZD to consolidated at depressed levels following their significant technical breaks.
• For GBPUSD specifically, we highlighted the breach of two support trendlines, drawn from both the Aug 01 and the January lows. Spot moved sharply lower to bridge the gap to the first target of 1.3333, the Sep 3 low and a key support. Below here, a key medium-term level resides at 1.3140.
• A downside break in NZD/USD has bolstered the bearish theme.
• USDJPY rose to within 4 pips of the 150 mark overnight, and its notable that the USDJPY recovery has outpaced that of the DXY, rallying 3.07% at its peak. A bullish candle pattern on Sep 17 - a hammer - provided an early reversal signal which remains valid. Sights are on 150.92, the Aug 1 high and key resistance.
• On Friday, the monthly Personal Income and Outlays report for August will provide greater clarity on recent momentum. Core PCE will also be watched with it widely expected to print softer than the 0.35% M/M seen for core CPI.

FOREX: NZDUSD at 5-Month Lows, Eyeing Weekly Close Below 0.5800 Pivot

For NZDUSD (-0.12%), spot sits comfortably below the noted pivot level of 0.5800, of which the downside break has bolstered the bearish theme. Today’s moderate extension of weakness places the pair at fresh five-month lows, making headway towards the next technical targets. 0.5728 and 0.5636 are the most obvious levels to focus on should a deeper selloff develop.

• The well documented impressive rally for AUDNZD extended overnight to reach 1.1351, before momentum has stalled. Market participants continue to eye a move towards 1.1491, the September 2022 high.
• Next week, New Zealand filled jobs data, business confidence and activity outlook figures are scheduled. Separately, the RBA is broadly expected to keep the cash rate unchanged at 3.6%.

Source: Bloomberg Finance L.P. / MNI

FOREX OPTIONS: Expiries For Sep26 NY Cut 1000ET (Source: DTCC)

• EURUSD: 1.1600 (602mln), 1.1645 (325mln), 1.1650 (675mln), 1.1685 (1.27bn), 1.1700 (1.67bn), 1.1710 (660mln)
• GBPUSD: 1.3320 (520mln), 1.3360 (490mln), 1.3370 (361mln)
• USDJPY: 150.00 (495mln), 152.00 (1.66bn)
• USDCAD: 1.3875 (954mln), 1.3900 (571mln), 1.3960 (480mln), 1.3965 (301mln)
• AUDUSD: 0.6515 (349mln), 0.6520 (250mln), 0.6550 (277mln), 0.6600 (481mln)

MNI Banxico Review – Sep '25: Guidance Signals Further Q4 Cuts

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Executive Summary

• Banxico’s governing board cut the overnight rate by a further 25bp to 7.50%, as was widely expected. The decision was split once again, with Deputy Governor Heath voting to keep the policy rate on hold.
• While the committee still sees significant downside risks to growth, near-term core inflation forecasts have risen.
• Nonetheless, the forward guidance was unchanged, suggesting scope for further easing ahead, and analysts continue to expect additional 25bp cuts in Q4, with the policy rate reaching 7.0% by year-end.

EQUITIES: EUROSTOXX 50 Futures Resistance Remains Exposed

A bull cycle in S&P E-Minis remains intact and the latest pullback is considered corrective - for now. The contract has pierced initial support at the 20-day EMA, at 6634.71. A clear breach of this average would signal scope for a deeper retracement, potentially towards the 50-day EMA, at 6519.15. Key short-term resistance has been defined at 6756.75, the Sep 22 high where a break would resume the primary uptrend.

• EUROSTOXX 50 futures are trading closer to their recent highs. The contract has cleared resistance around the 20-day EMA - a bullish development - and the subsequent rally reinforces a bullish theme. Sights are on 5525.00, the Aug 22 high and a bull trigger. Key support to monitor is 5302.00, the Sep 2 low. Clearance of this level is required to reinstate a bearish theme.

OUTLOOK: Price Signal Summary - Monitoring Resistance In WTI

The trend condition in Gold is unchanged and a bull cycle remains in play. A fresh all-time high once again, on Tuesday, confirms a resumption of the primary uptrend and an extension of the sequence of higher highs and higher lows. The next objective is the $3800.0 handle. Initial firm support lies at $3622.2, the 20-day EMA.

• WTI futures are trading closer to this week’s highs. Despite recent gains, the trend condition remains bearish and the recovery is considered corrective - for now. Initial resistance to watch is $65.43, the Sep 2 high. A clear break of it would suggest potential for a stronger recovery, towards key short-term resistance at $68.43, the Jul 30 high. On the downside, key support and the bear trigger has been defined at $60.85, Aug 13 low.

Date	GMT/Local	Impact	Country	Event
26/09/2025	1230/0830	***	CA	Gross Domestic Product by Industry
26/09/2025	1230/0830	***	US	Personal Income and Consumption
26/09/2025	1300/0900		US	Richmond Fed's Tom Barkin
26/09/2025	1400/1000	***	US	U. Mich. Survey of Consumers
26/09/2025	1400/1000	**	US	University of Michigan Surveys of Consumers Inflation Expectation
26/09/2025	1500/1100		CA	Finance Dept monthly Fiscal Monitor (expected)
26/09/2025	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly
26/09/2025	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly
26/09/2025	1700/1300		US	Fed Vice Chair Michelle Bowman
29/09/2025	-		AU	Reserve Bank of Australia Meeting
29/09/2025	0650/0850		EU	ECB Cipollone Keynote At Baltic Digital Euro Conference
29/09/2025	0700/0900	***	ES	HICP (p)
29/09/2025	0830/0930	**	GB	BOE Lending to Individuals
29/09/2025	0830/0930	**	GB	BOE M4
29/09/2025	0900/1100	*	EU	Consumer Confidence, Industrial Sentiment
29/09/2025	0900/1100		EU	ECB Schnabel On Current Aspects of Monetary Policy
29/09/2025	1200/1400		EU	ECB Lane In Policy Panel At Inflation Conference
29/09/2025	1200/0800		US	Cleveland Fed's Beth Hammack
29/09/2025	1330/0930		US	NY Fed's Roberto Perli
29/09/2025	1400/1000	**	US	NAR Pending Home Sales
29/09/2025	1430/1030	**	US	Dallas Fed manufacturing survey
29/09/2025	1530/1130	*	US	US Treasury Auction Result for 26 Week Bill
29/09/2025	1530/1130	*	US	US Treasury Auction Result for 13 Week Bill
29/09/2025	1730/1330		US	St. Louis Fed's Alberto Musalem
29/09/2025	1730/1330		US	Ex-St. Louis Fed's James Bullard
29/09/2025	1730/1330		US	New York Fed's John Williams
29/09/2025	2200/1800		US	Atlanta Fed's Raphael Bostic