IRAN: FT-European Capitals Believe Enriched Uranium Moved Pre-US Strike

House prices were surprisingly soft back in March, with both the FHFA and S&P CoreLogic 20-city measures recording their first simultaneous seasonally adjusted decline since Aug 2022. It comes as existing home sale relative supply has recently increased to its highest for the time of year since 2016 although these FHFA /S&P Corelogic series still see reasonable Y/Y increases. 

• FHFA house prices surprisingly dipped -0.05% M/M (sa, cons 0.1%) in March after a downward revised 0.02% (initial 0.14%), for its first monthly decline since Aug 2022.
• S&P CoreLogic 20-city -0.12% M/M (sa, cons 0.2%) in March after an unrevised 0.40% M/M, its first monthly decline since Jan 2023.
• Recent run rates are still reasonable considering the build in relative supply of inventories to sales in both existing and new home sales data. Whilst new home sales relative supply has been high for some time, existing home sale inventory has recently increased with the 4.0 months of sales back in March the highest for that month since 2016, a trend that held more recently in April at 4.4 months.
• The S&P Core Logic 20-city measure is still up 4.1% Y/Y, and with a 3m/3m run rate a touch stronger at 4.4% annualized, although the FHFA series is a little softer at 3.7% Y/Y and 3.1% 3m/3m annualized.
• A reminder that these metrics are 53% (S&P) and 55% (FHFA) higher than pre-pandemic levels.

• 10-year Gilt yields are now little changed on the session at 4.679%. UK-specific news flow has been light, with no reaction to today’s tier 2 data (in-line BRC shop sales index and soft CBI distributive trades).
• A reminder that the 4.800% has contained upside in the 10-year yield across the last three months, most recently last Thursday.
• Gilts have seen a more aggressive unwind of the early rally than German or US counterparts. This may reflect lingering worries around the UK’s fiscal outlook, particularly with Chancellor Reeve’s spending review on June 11 coming into view.
• 30-year Gilt yields are still 2.5bps lower on the session following this morning’s historic rally in long-end JGBs.
• Gilt futures (G M5) are +22 ticks versus Friday’s settlement levels at 91.22. We expect U5 to be the front contract as of tomorrow.
• Tomorrow’s regional calendar is headlined by a E2.75bln auction of 8-year Gilts and an appearance from BOE Chief Economist Pill at 1600BST. The topic of Pill’s speech is “Monetary policy: taking a walk on the supply side”.

• MNI: US Q1 FHFA HPI Q/Q SA +0.7% V +4.0% Q1 2024