US TSY FUTURES: BLOCK: Late June'25 5Y/30Y Ultra Bond Steepener

House price gains came in a little stronger than expected in November, with the S&P Corelogic 20-City aggregate rising 0.41% M/M (0.30% expected), and prior revised up 0.03pp to 0.35%.

• However the FHFA price index was merely in line at 0.3% M/M and decelerated from 0.5% prior.
• And both aggregates - while still solid on a Y/Y basis - have decelerated from recent highs. The S&P CL  Y/Y metric was 4.3%, up from 4.2% prior, but well off the 10+% readings in summer 2023; likewise the FHFA Y/Y at 4.2% (a 17-month low) was well below the 8-9% readings of summer 2023.
• The momentum indices are mixed: for the FHFA, momentum has picked up moderately (3M SAAR at 6.0% in Nov, an 8-month best), but S&P momentum fell to the weakest in 18-months (3.8%).
• To be sure, prices remain buoyant: the S&P index hit an 18th consecutive all-time high. But as the FHFA noted re the weakening Y/Y rises, “The slowdown in price growth is likely due to higher mortgage rates contributing to cooling demand", while S&P Dow Jones identified "below-trend" growth in prices.
• Higher rates have not dampened prices. But we continue to highlight historically weak sales activity - amid high mortgage rates - inhibiting price discovery, perhaps best seen in some of the lowest inventories-to-sales ratios in modern history for existing homes.
• Again, it will probably take a sharp drop in mortgage rates, a rise in unemployment - or both - for the housing market to get out of its prolonged period of stasis.

Curve steepener blocked after the bell at 1524:00ET, DV01 $375,000:

• +9,000 FVH5 106-16.75, post time offer vs.
• -4,300 UXYH5 111-18, sell through 111-18.5 post time bid

• RES 4: 0.6441 38.2% retracement of the Sep 30 - Jan 13 downleg  
• RES 3: 0.6429 High Dec 12               
• RES 2: 0.6384 High Dec 13  
• RES 1: 0.6325/6331 50-day EMA / High Jan 24
• PRICE: 0.6248 @ 16:38 GMT Jan 28 
• SUP 1: 0.6209 Low Jan 21     
• SUP 3: 0.6165/31 Low Jan 17 / 13 and the bear trigger
• SUP 3: 0.6100 Round number support
• SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing

A medium-term bearish trend condition in AUDUSD remains intact and recent gains have stalled at resistance around the 50-day EMA, at 0.6325. The reversal lower suggests the possible end of the correction between Jan 13 - 24. A continuation lower would open 0.6131, the Jan 13 low and the bear trigger. On the upside, a clear breach of the 50-day average is required to signal scope for a stronger recovery.