JPY: FX Exchange traded Option

Pending home sales showed a little more resilience than expected in March, picking up 1.5% M/M (0.5% expected) after 2.5% in February (rev from 1.8%). While this still leaves pending sales levels below the November 2025 pace, it at least means that the 8+% plunge over December and January to all-time lows probably marked the nadir for now. 

• Sales picked up in 2 of 4 regions (Northeast +4.4%, rebounding after 2 big drops, and South +3.9%), with declines in the Midwest (-1.3%) and West (-2.6%) after two months of growth. The report made particular note about prospects for renewed strength in the South after price drops and continued emplohment resilience.
• This is a leading indicator for existing home sales, which have duly stalled kin 2026 so far with drops in January and March to a 9-month low. Pending sales holding up in the face of a rebound in mortgage rates alongside the Middle East War-induced energy price shock, though overall activity remains very weak.
• The NAR's Chief Economist Lawrence Yun acknowledged this resilience amid a tightening in financing, citing pent-up demand; we note also that months of existing home supply in terms of monthly sales rose to a 4-month high 4.1 in March: "Contract signings rose in March despite higher mortgage rates, pointing to pent-up housing demand. A greater supply of inventory will help translate that demand into more home sales.”

Cues from Tsys have dominated over the past couple of hours, with little in the way of clarity re: the potential U.S.-Iran negotiations provided in the latest round of headlines.

• U.S. data-driven downticks in futures have been limited, with bears unable to retest support (87.82), although they remain in technical control.
• Yields 6bp higher to 1bp lower, curve flattens.
• Front end of the gilt curve continues to underperform on the day, with some of the outcomes within this morning’s labour market data (lower unemployment, driven by participation rate swings and firmer-than-expected economy-wide wage figures) factoring into the initial selling on the open, albeit with our macro team noting that the report was soft overall.
• BoE-dated OIS 0.5-7.0bp more hawkish across ’26 meetings, with 39bp of hikes now showing through year-end vs. less than 25bp at one stage on Friday (when risk-on price action linked to hope surrounding the U.S.-Iran situation peaked).
• SONIA futures 0.5-8.0 lower.
• The front end move is even more notable when viewed against the backdrop of Energy Secretary Miliband releasing his plan to delink gas and electricity prices.
• Comments from former senior Civil Servant Robbins failed to provide a definitive uptick in risks re: the future of PM Starmer.
• The BoE remains more sensitive to upside surprises in inflation at this juncture, as the MPC is on the lookout for further signs of inflationary passthrough linked to the Iran conflict.
• Our full preview of tomorrow’s CPI release is available here.

• +60,000 TYQ6 108.5 puts, 20 vs. 111-14/0.18% at 0946:28ET - adds to over 21k on screen reported a few minutes ago