US DATA: Poor Affordability Manifests In Record-Low Pending Home Sales

Pending home sales deteriorated unexpectedly in January, falling 0.8% M/M on a seasonally-adjusted basis (+2.0% expected) after a 7.4% fall in December and marking a new all-time low (even compared to the start of the Covid pandemic and the depths of the Global Financial Crisis and related housing crash). * For good measure, it was the weakest-ever January on a non-seasonally-adjusted basis (the series goes back to 2001). * We were almost surprised that the National Association of Realtors did not suggest that weather was to blame for this poor reading, given January's storms across most of the country. Instead their Chief Economist Lawrence Yun is quoted as saying "Improving affordability conditions have yet to induce more buying activity." * In the previously-released Existing home sales report for January, Yun had mentioned that weather was a possible driver for the worst monthly sales since September 2024, but as we noted, the drop had been presaged by a pullback in pending sales. (Pending is a leading indicator of Existing). * In a mixed report on a regional basis, pending sales fell in the Northeast and South, rising in the Midwest and West. * Nascent signs of a thaw in housing activity in late 2025 - which came alongside moderating mortgage rates - has dissipated, with homebuilder confidence also pulling back. * As such we remain pessimistic that there will be any meaningful recovery in housing market dynamics in 2026 absent an unexpected pullback in mortgage rates boosting affordability.

IRAN: Trump: We Have To Make A Meaningful Deal, They Can't Have Nuclear Weapons

Speaking at the opening meeting of the Board of Peace, US President Donald Trump says, "There are good talks. We have to make a meaningful deal; otherwise, bad things happen We will find out about a deal in the next 10 days." Adds that "They can't have nuclear weapons very simple they can't have, you can't have peace in the Middle East, if they have a nuclear weapon." Trump: "the key was getting rid of the nuclear potential because Iran would have had a nuclear weapon, based on everything we found out since within one month, we can't let that happen."

MEXICO: Banxico's Heath Continues To Emphasise Concerns On Inflation Risks

* The minutes reveal that Banxico Deputy Governor Jonathan Heath had a dissenting view on the monetary policy statement, where he continued to emphasise his concerns over the inflation outlook: * "Although our inflation forecasts have been revised upwards, inflation still remains clearly below the levels reported in all inflation expectations surveys. The duration of the effects of fiscal adjustments is still uncertain and could involve significant lags. Inflation is thus more likely to be underestimated than overestimated and therefore risks for inflation remain biased to the upside and are far from being characterized as "closer to balance"." * "Although the decision to pause is correct, the rationale behind it omits the most important elements that, in my opinion, support such decision, namely the worsening inflationary dynamics and the large forecast error observed in 2025. Finally, our forward guidance needs to signal that we will remain vigilant to the evolution of data and will need to assess the "timing" of additional rate adjustments. Omitting to mention this would signal a possible adjustment in upcoming monetary policy decisions, which I consider premature and inconsistent with the trajectory required to foster an orderly and sustained convergence of inflation to the 3% target."

MEXICO: Banxico Releases Minutes of February MPC Meeting

* The minutes to the Feb 05 MPC meeting are here: https://www.banxico.org.mx/canales/%7B73BBDB1C-E7CD-1FEC-0286-0AC25F6F748C%7D .pdf. * At that meeting, the Board left the overnight rate unchanged at 7.00%, as expected, in a unanimous decision. * The pause in the easing cycle came as the Board pushed back the projected convergence of CPI inflation to target to Q2 2027. However, the statement maintained a dovish bias, with the forward guidance keeping the door open to a renewed rate cut as soon as next month.