Tuesday: Existing Homes 3.98M. Tape consolidated.

Catalyst check. Tuesday September 22. Two scheduled US catalysts. First, NAR Existing Home Sales for August at 10:00 AM ET: 3.98 million SAAR versus a July revised print of 4.06 million, a 2.0 percent month-on-month decline and a 1.2 percent year-on-year decline. Months-supply of inventory climbed to 4.9 months (source: NAR release, Sep 22), the highest level in more than a decade. Median existing-home price 429,100 dollars, up 1.6 percent year-on-year (price still holding, volume slowing). Second, the Richmond Fed Manufacturing Index at 10:00 AM ET printed inside the recent range, and the Philadelphia Fed non-manufacturing survey landed at 8:30 AM ET. Overnight, Fed governor Michael Barr flagged a Wednesday housing speech on the Federal Reserve calendar; no unscheduled central-bank commentary of consequence. Release times verified against the NAR statistical schedule and the Federal Reserve calendar.

Monday's piece read the tape as textbook week-two behaviour: DXY 100.43, USD/JPY 157.37, gold 4,383.90, 10Y 4.963 percent. The framework called for continued consolidation on light volume through the New Home Sales and Michigan prints, with the Core PCE anchor as the specific week-two test. Tuesday delivered the consolidation as expected. DXY added 17 pips to 100.60. Gold slipped 7.50 dollars to 4,376.40. 10Y ticked up 0.5bp to 4.968 percent. The 2.0 percent volume drop in Existing Home Sales did not move the dashboard because the price component held; the housing dimension is decelerating on quantity rather than cracking on price, which is a slower-growth read rather than a distressed-market read.

The tape

• DXY: 100.60, up 17 pips from Monday's 100.43. Intraday range 100.42 to 100.72. Third consecutive close above the 100.30 pivot the framework has been tracking since the September 16 FOMC. Extension without violence, still the acceptance-and-testing footprint.
• 10-year yield: 4.968 percent, up 0.5bp from Monday's 4.963 percent. The 2-year up 1.2bp to 4.594; the 30-year up 0.3bp to 5.011. Small curve steepening. The term-premium impulse from the September 16 hike is holding near +15bp above the pre-hike level.
• Gold: $4,376.40, down $7.50 from Monday's $4,383.90. Range $4,352 to $4,398. Fourth consecutive session inside the $4,300-$4,400 band, which is the specific consolidation range the post-restart-hike framework called for.
• USD/JPY: 157.46, up 9 pips from Monday's 157.37. Effectively flat; the residual short-yen unwinding from Friday's BoJ decision has run its course and further USD/JPY moves are now Fed-driven only, exactly the read Friday's BoJ note flagged.
• EUR/USD: 1.1448, down 17 pips. GBP/USD: 1.3343, down 28 pips. Sterling continues to underperform on soft UK PMI data overnight; the pair sits 55 pips from its 52-week low.
• Brent CFD spot: $99.25, down $1.09 from Monday's $100.34. Range $98.70 to $100.55. Two touches of $100 during the New York morning that both faded; Jazan Phase Three restart continues to unwind the supply-shock premium, and Brent is now roughly 15 percent above the pre-Iran, pre-Jazan baseline versus 30 percent at the September 8 peak.

The Existing Home Sales print

3.98 million SAAR is the second sub-4-million print since April and confirms that the housing volume dimension has softened materially even as prices hold. The 4.9-month supply-of-inventory read (source: NAR release) is the highest since 2016; in the same series pre-COVID this level historically produced month-on-month price declines within two-to-three quarters. That gap between quantity (soft) and price (holding) is the specific pattern that reads through to a slow-then-fast adjustment rather than a smooth deceleration. Median price up 1.6 percent year-on-year suggests the price side has not yet caught up with the inventory build; that is where the housing dashboard's tail risk sits.

Regional detail worth noting: sales fell 4 percent in the Northeast, 3.1 percent in the Midwest, and 1.6 percent in the South, but were unchanged in the West at 720k units annualised. The bifurcation is Sunbelt-vs-Rust-Belt, which fits the labour-market and mortgage-rate transmission pattern we have logged since May.

The read

Two things worth logging from Tuesday. First, the tape did what week two of a restart-hike cycle is supposed to do: consolidate on light volume without extending violently and without fading. DXY, USD/JPY, gold, and the 10Y all inside their week-two ranges; the market is waiting for the next data anchor. Second, the housing print is a soft-side data point that does not undermine the Fed's inflation-first framework. Warsh built the September SEP around Core PCE staying above 3 percent through 2027; a housing volume slowdown does not touch that projection. The tape's non-reaction to the 3.98M print (DXY unchanged in the ninety seconds after release) is the specific footprint of a market that has priced the SEP-median trajectory and is not looking for reasons to fade it. See our reference on Existing Home Sales as a macro signal for the anatomy of the report and why the months-supply component leads price.

Working thesis largely unchanged from Monday. Additional-hike-within-2026 at 62 percent. Hold-through-2027-with-no-cuts at 33 percent. Cuts-restart-inside-2027 at 5 percent. Tuesday added no signal to move the distribution.

Setup update

Confirmed if: DXY holds above 100.30 into Wednesday's US session and 10Y holds above 4.90 percent. The next scheduled US catalyst is the S&P Global flash PMIs at 9:45 AM ET Wednesday; consensus is 53.7 on the manufacturing side and 56.0 on the services side. A print materially above consensus is the setup that would push October FOMC hike odds off the 42-percent CME FedWatch level, which is the specific read to log for the Wednesday tape.

Invalidated if: DXY breaks 100.10 on the Wednesday close, which would signal that Tuesday's consolidation was the top of the week-two extension. Under that read the market would fade the SEP-median trajectory and shift the September 30 Core PCE (the actual BEA release date, corrected from the September 21 note) into the "downside skew" bucket.

Watch this week: Wednesday delivers S&P Global flash PMIs at 9:45 AM ET. Thursday delivers Weekly Jobless Claims at 8:30 AM ET (consensus 201k, prior 198k revised), Kansas City Fed manufacturing at 11:00 AM ET, and the Barr housing speech at midday. Friday September 25 delivers Durable Goods Orders at 8:30 AM ET (consensus -0.4 percent) and the University of Michigan Consumer Sentiment Final at 10:00 AM ET (preliminary print was 47.8, consensus 47.6). Correction to the September 21 note: the August Core PCE lands Wednesday September 30, not this Friday. September 26 falls on a Saturday, and the BEA calendar places the release at 8:30 AM ET Wednesday September 30 (source: BEA release schedule). The next Fed speech from Warsh is his NABE address in Washington, currently scheduled for Thursday afternoon.

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