Group 1: Dollar Index and Economic Indicators - The dollar index (DXY00) rose slightly by +0.02% on Monday, supported by stock market weakness and a stronger-than-expected November pending home sales report, which increased by +3.3% month-over-month against expectations of +0.9% [1][4] - The dollar faced downward pressure after the December Dallas Fed manufacturing outlook unexpectedly declined by -0.5 to -10.9, contrary to expectations of an increase to -6.0 [1][4] Group 2: Federal Reserve and Interest Rates - The markets are currently pricing in a 16% chance of a -25 basis point rate cut at the FOMC's next meeting scheduled for January 27-28, with expectations of a total -50 basis point cut by 2026 [2] - The Federal Reserve is increasing liquidity in the financial system by purchasing $40 billion a month in T-bills, which is contributing to the dollar's underlying weakness [3] Group 3: International Currency Movements - The euro (EUR/USD) fell by -0.03% on Monday due to a lack of progress in talks to resolve the Russian-Ukrainian war and lower Eurozone government bond yields, with the 10-year German bund yield dropping to a 3-week low of 2.824% [5] - The yen (USD/JPY) rose by +0.35% against the dollar, supported by indications from the December 19 BOJ meeting that further rate increases are likely due to Japan's low real interest rates [6]

Core Insights - The pending home sales index, which serves as a leading indicator for house sales based on contract signings, increased by 3.3% month-over-month in November, reaching a value of 79.2 [1] Group 1 - The increase in the pending home sales index suggests a potential uptick in housing market activity [1] - The current index level indicates a recovery trend in the housing market, which may influence future sales and pricing dynamics [1] - The month-over-month growth reflects positive sentiment among home buyers, potentially driven by favorable market conditions [1]

Core Insights - Lower mortgage rates and slowing price growth have led to a 3.3% increase in pending home sales in November, marking the largest rise in contract signings since early 2023, surpassing the expected 0.9% increase [1][2] - Year-over-year, contract activity has risen by 2.6%, with all regions experiencing an increase, particularly the West, which saw a 9.2% month-over-month gain [2][3] - The improving affordability in housing, driven by lower mortgage rates and faster wage growth compared to home prices, is encouraging buyers to enter the market [3][4] Market Conditions - The housing market has faced significant challenges since mid-2022 due to rising mortgage rates and increased home prices, which have excluded many potential buyers [4][5] - The average rate for a 30-year mortgage has been around 6.2% recently, down from a peak of 7% in early 2025, contributing to the recent uptick in market activity [5][6] - Despite the recent increase, home sales in 2025 are projected to be at or near three-decade lows, although a gradual normalization of the housing market is anticipated as inventory levels improve and mortgage rates decrease [6]

Market Trends - Pending home sales in October increased by 1.9% compared to September, exceeding expectations [1] - However, pending home sales were down 4% compared to October of the previous year [1] - The increase in sales may be attributed to falling mortgage rates in October, but rates rose again in November [2] - Housing supply remains relatively stagnant month-to-month and is currently weakening [2] Regional Analysis - Sales increased on a monthly basis in all regions except the West, which experienced a slight decrease [3] - The West is the most expensive region in the country [3] Seller Behavior - Nearly 85,000 US sellers removed their homes from the market in September, a 28% increase from the previous year and the highest level in eight years for that month [4] - Consumer sentiment may be influencing sellers' decisions to delist their properties [4]

Economic Indicators - March Personal Consumption Expenditures (PCE) showed a month-over-month change of 0.0%, which was -30 basis points below the previous month, while year-over-year PCE reached +2.3%, slightly above expectations but down 40 basis points from +2.7% in February [2] - Core PCE, excluding food and energy, also reported a month-over-month change of 0.0%, down from +0.1% projected and +0.4% reported a month ago, with a year-over-year figure of +2.6%, down from +3.0% the prior month [3] Housing Market - Pending Home Sales increased by +6.1% in March, surpassing the +1% expected and the upwardly revised +2.1% for February, marking the highest level since September of the previous year [4] - The South region led the increase with +9.8%, followed by the Midwest at +4.9% and the West at +4.8%, while the Northeast experienced a decline of -0.5% [5] Company Earnings - Meta Platforms reported Q1 earnings of $6.43 per share, exceeding the expected $5.22, with revenues of $42.31 billion surpassing the $41.22 billion estimate, and Daily Active People grew +6% year over year to 3.43 billion [6] - Microsoft reported Q1 earnings of $3.46 billion, beating the $3.20 billion estimate, with revenues of $70.1 billion exceeding the projected $68.4 billion, and Azure cloud sales increased by +20% to $42.4 billion [7] - Qualcomm's fiscal Q2 earnings were $2.85 per share, beating estimates by 3 cents, with revenues of $10.83 billion surpassing the $10.67 billion consensus, although a lower revenue guide for Q3 led to a -6.3% decline in after-market shares [8]