MEXICO: USDMXN Pierces Resistance At 50-day EMA Amid Regional Banking Concerns

• Treasuries sit modestly bull flatter ahead of today’s FOMC decision and Summary of Economic Projections including a closely watched dot plot.
• Some softness in equity and crude oil futures likely feeds into the day’s rally, aided by the FT reporting that "China tells its tech companies to stop buying all of Nvidia's AI chips".
• EGBs see similarly broadly similar momentum whilst yesterday’s solid UST 20Y auction drew little reaction at the time but won’t be hindering the flattening seen in London hours.
• Cash yields are 0.5-2.5bp lower on the day.
• 10Y yields at 4.013% (-1.5bp) are off an earlier low of 4.0012% that eyed the first sub-4% since brief visits on Sep 11 and early April around reciprocal tariff announcements.
• TYZ5 trades at 113-19 (+02) off an earlier high of 113-21+ on another overnight session with thin volumes at 180k.
• Today’s modest gains mark the latest step back closer to resistance at 113-29 (Sep 11 high), as part of the bull mode condition. Further resistance is seen nearby at the round 114-00 whilst support is seen at 112-28 (20-day EMA).  
• Data: Housing starts/building permits Aug/Aug prelim (0830ET)
• Fed: FOMC decision (1400ET), Powell press conference (1430ET)
• Bill issuance: US Tsy to sell $65bn 17-week bills (1130ET)
• Politics: Trump in UK, including Windsor Castle arriving ceremony (0720ET) and state banquet (1530ET)

Decent FX Exchange traded Option, unconfirmed unwind:

• EURUSD (3rd Oct) 1.1700p, sold at 0.0016 in ~7.3k.

There's 8.4k OI in that strike.

• The EU will announce the details of its bond auction of Monday 22 September at midday BST / 7:00ET / 13:00CET.
• Provisionally this has been announced as the first auction at which the EU will hold a second non-competitive round (at which a further 20% would be available the following day).
• We assume that we will receive confirmation and further details of this today, alongside the bonds that will be on offer.
• We are unsure at this stage whether the non-competitive round will bring any change in sizes in the first round (we assume not) and we still expect triple line EU-bond auctions to be held for the considerable future.