MNI US MARKETS ANALYSIS - USD Strength Pervades

Highlights: * Xi Jinping heads to Washington, meetings with Trump in focus * Flash PMI data in focus, as well as more Fedspeak * USD strength pervades, putting key levels in both GBPUSD and USDMXN into view US TSYS: Paring Gains, Flash PMIs Ahead, Trump Welcomes Xi Tonight: s-xi-tonight-1790161492747 Treasuries are mildly firmer, near recent lows with curves bull flattening: 2s10s at late February 2025 levels. Similar moves in EGBs following hawkish flash PMIs and softer crude prices.

Oil decline as talks continue on sidelines following yesterday's UN gathering - US special envoy Witkoff said that lengthy talks have taken place with the Iranian delegation through mediators and they are set to continue. Modest US data calendar and Fed speak ahead. * Cash yields off lows - near flat across the curve at the moment. 653 vs.

030 lows - lowest since February 26, 2025. 5. * TYZ6 remains in consolidation mode - for now. The latest pause means price continues to trade closer to its recent levels and the sideways move highlights a flag formation - a bearish continuation pattern.

This reinforces a bearish theme. A resumption of the downtrend would open 105-10+, the Oct 19 '23 low on the continuation chart. Initial firm resistance is 106-24+, at the 20-day EMA * Data: MBA Mortgage Applications (0700ET), S&P Global US flash PMIs (0945ET). * Fedspeak: Fed Gov Barr on housing (text, mediated Q&A at 1005ET), Chicago Fed Goolsbee podcast interview (1200ET).

* Coupon issuance: US Tsy $28B 2Y FRN re-open (91282CRD5) auction (1130ET) followed by US Tsy $70bn 5Y notes - 91282CRN3 (1300ET). 393% high yield vs. 37x bid-to-cover vs. 32x 5-auction avg).

* Bill issuance: US Tsy $72bn 17W bills (1130ET) * Politics: President Trump returns from NY, will participates in an Arrival Ceremony with the President of the People's Republic of China at 1800ET. 500 proj of Jun 30 - Jul 14 - 17 price swing Treasuries remain in consolidation mode - for now. The latest pause means price continues to trade closer to its recent and the sideways move highlights a flag formation - a bearish continuation pattern. This reinforces a bearish theme.

A resumption of the downtrend would open 105-10+, the Oct 19 '23 low on the continuation chart. Initial firm resistance is 106-24+, at the 20-day EMA. EGBS: Yields Off Session Lows Following Hawkish PMIs, Energy Recovery: mis-energy-recovery-1790156252087 German yields have moved away from session lows, a combination of hawkish flash PMIs and a small recovery in energy benchmarks. 244%.

If next week's Eurozone flash September inflation readings surprise meaningfully to the upside, it could bring an ECB October hike back into play (currently ~55% priced). * The Eurozone-wide September flash PMI confirms another solid month of activity, extending resilience in the face of the US-Iran war energy shock. Both services and manufacturing components contributed, though the former was the main upside surprise versus consensus. Taken alongside hawkish developments inflation components, there is little to push back on the hawkish rhetoric employed at the ECB's September decision.

573%. 90% Aug-56 Bund. * In futures, volumes in Bobl (over 300k cumulative) stand out relative to the rest of the curve. For context, cumulative volumes in Bund are ~320k.

* 10-year EGB spreads to Bunds are slightly narrower on the session. The OAT/Bund spread remains above 100bps. EUROPE ISSUANCE UPDATE Slovakia syndication: Spread set * MNI pencil E3-4bln of the new 10-year Sep-36 SlovGB. 0bn.

40% May-47 Bund. 06x). 90% Aug-56 Bund. 58x).

3274, the pullback low before the August rally. 00), short-term underlying momentum in EURGBP is also beginning to look positive, as evidenced in the upturn for the 50-dma - narrowing the gap with both the 100- and 200-dma measures. 4 points over the past week and is challenging the recent downtrend), but it looks unlikely we'll return to the levels of outright vol enjoyed earlier this year. 3140 - the YTD low posted in June.

It's here that a possible range break-out will be in focus - a development that could underpin vols, particularly if the mirrored pricing for the BoE and ECB policy cycles is disrupted. * As such, UK pay settlements remain a key focus, and markets will be watching for any flattening out of pay expectations through year-end, particularly in light of the Brightmine wage data overnight, which showed few signs of elevated pay demands driving future inflation, as the rise in their pay awards measure in August was unchanged. The most important measure here is the BoE's DMP CPI expectations release on October 2nd.

* Bolstering the importance of the late June low is it's coincidence with several phases of dip-buying in the pair since the start of 2025. 2% retracement - adding additional weight to the zone of support. MEXICO: USDMXN Surges as Hawkish Fed Outweighs Cautious Banxico: ious-banxico-1790159170919 * Post-Fed dollar strength continues to play out nicely against the Mexican peso on Wednesday, with the most recent price extension amplified by yesterday's break of trendline resistance, drawn from the year's high. 40 mark ahead of the NY crossover.

* While relative optimism surrounding trade talks with the US and a cautious leaning Banxico had been viewed as significant positives for the peso across much of 2026, the hawkish Fed meeting last week appears to be dominating the short-term narrative, bolstered by the latest technical developments. 6764 (Jun 24 high), which could potentially come into play over Thursday's Banxico decision should the committee be more upbeat on the recent progress for inflation. * It's worth noting that ahead of tomorrow's decision, July economic activity and mid-Sep CPI data are scheduled. 86.

35% weaker this morning. A set of solid flash PMIs from the Eurozone have had no effect on the softening Euro. 1325, the Jun 24 low and a key medium-term support. 5694.

5762 and the ensuing weakness proves that short-term rallies remain purely corrective at this juncture, with a strong underlying bearish theme in play. 5626. * In emerging markets, dollar strength is playing out nicely against the Mexican peso as we approach a Banxico decision on Thursday. 38 this morning.

* US flash PMIs highlight the calendar on Thursday before the focus turns to the Trump-Xi summit and a plethora of central bank decisions on Thursday. 98bn of high-yielding FCNR(B) dollar deposits - substantially above the RBI's initial guidance of $80-90bn. Despite the scale of these inflows, their impact on the INR has so far been relatively modest. Yet they have still created a sizeable liquidity-management challenge for the RBI as the conversion of these dollars into rupees has materially expanded domestic liquidity.

* INR has strengthened since mid-September, but its gains have been relatively contained in the context of the >10% decline in crude prices from the September highs. Intraday pressures also persist, with reports today pointing to further RBI intervention to prevent further spot losses. * The liquidity impact has nevertheless been substantial. 44tn.

* The facility has therefore provided only modest FX support while leaving the RBI with a sizeable sterilisation task. With Bloomberg reporting that the RBI and Finance Ministry will meet today to set the H2 borrowing calendar, the extent to which excess liquidity is absorbed through FX swaps versus outright bond sales will matter for the supply backdrop in IGBs. Yields across the curve are up as much as 2bps today, while the 10-year yield hit its highest level since May last week.

EQUITIES: Bullish E-Mini S&P Price Action Signals End of a Corrective Cycle: nd-of-a-corrective-cycle-1790154275821 * Despite recent gains, EuroStoxx 50 futures are trading closer to their recent lows. A short-term bearish theme remains in play. 02, has recently been breached, strengthening a bear threat. 59, a Fibonacci projection.

Resistance to watch is at the 50-day EMA. * A strong rally in S&P E-Minis on Monday marked a bullish start to this week's session and has strengthened the likelihood of a recent reversal and the end of a corrective cycle. Note too, that a bullish engulfing candle on Sep 17, also highlights a reversal signal. 00, the Aug 13 high and key medium-term bull trigger.

00, the Sep 16 low. 66, the 50-day EMA. COMMODITIES: WTI MA Studies Remain Bullish, Despite Recent Pullback: t-pullback-1790154282921 * A bull cycle in WTI futures remains intact and the latest pullback appears corrective - for now. Note that MA studies are in a bull-mode position and this highlights a dominant uptrend.

28. 71, the 50-day EMA. A clear break of it would undermine the bull theme. 69, the Sep 15 high.

* Recent gains in Gold resulted in a break of both the 20- and 50-day EMAs. This is potentially an early reversal signal and if correct, an indication that the recent corrective bear cycle may be over. 2, Fibonacci retracement points. 6, the Sep 16 low.

Clearance of this level would instead confirm a resumption of the recent bear leg.

------------------------------------------------------------------------------- Date GMT/Local Impact Country Event 23/09/2026 1100/0700 ** US MBA Weekly Applications Index 23/09/2026 1345/0945 *** US S&P Global Flash PMI 23/09/2026 1405/1005 US Fed's Michael Barr 23/09/2026 1430/1030 ** US DOE Weekly Crude Oil Stocks 23/09/2026 1530/1130 ** US US Treasury Auction Result for 2 Year Floating Rate Note 23/09/2026 1600/1800 EU ECB Cipollone At Fondazione ResPublica event 23/09/2026 1630/1830 EU ECB Lane Gives Lecture At ICMB 23/09/2026 1700/1300 * US US Treasury Auction Result for 5 Year Note 24/09/2026 0030/0930 ** JP Jibun Bank Flash Japan PMI 24/09/2026 0130/1130 *** AU Labor Force Survey 24/09/2026 0645/0845 ** FR Manufacturing Sentiment 24/09/2026 0645/0845 ** FR Consumer Sentiment 24/09/2026 0700/0900 ** ES PPI 24/09/2026 0715/0915 EU ECB Schnabel At Women Economic Forum 24/09/2026 0730/0930 *** SE Riksbank Interest Rate Decison 24/09/2026 0730/0930 *** CH SNB Interest Rate Decision 24/09/2026 0800/1000 *** NO Norges Bank Rate Decision 24/09/2026 0800/1000 *** DE IFO Business Climate Index 24/09/2026 0810/0410 US New York Fed's John Williams 24/09/2026 0900/1100 EU ECB Lane Lecture In Switzerland 24/09/2026 0930/1030 GB BOE Dhingra Panel on Monetary Policy Outlook 24/09/2026 1000/1100 ** GB CBI Distributive Trades 24/09/2026 - GB BOE MPG Meeting 24/09/2026 1200/0800 US Richmond Fed's Tom Barkin 24/09/2026 1230/0830 ** US USDA-FAS Weekly Export Sales 24/09/2026 1230/0830 *** US Jobless Claims 24/09/2026 1230/0830 ** CA Retail Trade 24/09/2026 1230/0830 * CA Payroll employment 24/09/2026 1230/0830 * US Current Account 24/09/2026 1230/0830 ** CA Monthly Survey Manufacturing Advance Indicator 24/09/2026 1250/0850 US Cleveland Fed's Beth Hammack 24/09/2026 1300/1500 ** BE BNB Business Confidence 24/09/2026 1330/1430 GB BOE Breeden Fireside Chat at UK Macro Policy Forum 24/09/2026 1400/1000 *** US New Home Sales 24/09/2026 1400/1500 GB BOE Lombardelli Speech at NBP Conference "Macroeconomic Policy in a Heterogeneous and Imperfectly Rational World" 24/09/2026 1410/1010 US Philly Fed's Anna Paulson 24/09/2026 1430/1030 ** US Natural Gas Stocks 24/09/2026 1530/1130 * US US Bill 08 Week Treasury Auction Result 24/09/2026 1530/1130 ** US US Bill 04 Week Treasury Auction Result 24/09/2026 1700/1300 ** US US Treasury Auction Result for 7 Year Note 24/09/2026 1900/1500 *** MX Mexico Interest Rate