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Indian government officials stated that 16 ships carrying fertilizer bound for India are currently in the Strait of Hormuz.

(1) On Monday, UK real estate website Rightmove announced that the asking prices for newly listed houses and apartments in June recorded the largest monthly decline in 14 years, dropping by 0.6% month-on-month, compared to a 1.2% month-on-month increase in May. (2) Year-on-year, the asking prices in June dropped by 0.5% compared to the same period last year, continuing the downward trend from May's 0.3% year-on-year decrease. Buyer demand fell by 10% in May when the UK recorded its hottest temperatures in history. (3) According to Rightmove property experts, such a significant price drop in June is highly unusual, as prices tend to rise moderately at this time of year. The abnormality this time is attributed to economic uncertainty, the overlap of bank holidays and a heatwave, as well as a higher number of properties listed on the market. (4) The number of new properties listed for sale fell by 5% year-on-year, but remains 6% higher than the same period in 2024. The number of agreed sales is 6% lower than last year, and is in line with 2024's transaction volume. (5) As of June 8, the average interest rate on two-year fixed mortgages fell to 5.07%, down from 5.18% a month earlier.

⑴ The foreign exchange options market's breakout warning signals for USD/JPY are dissipating, as the 1-week 10-delta butterfly spread has declined from the highest level since 2020 at 2.9 down to 2.0.⑵ The benchmark 1-month 10-delta butterfly spread has fallen from 1.8 to 1.4, and the 1-month 25-delta butterfly spread is trading at 0.5 today with sellers emerging, indicating that the market's tolerance for two-sided tail risks is rising.⑶ Butterfly spreads measure the implied volatility difference between at-the-money straddle options and low-delta options; a sharp decrease implies that the market perceives a lower probability of sudden, dramatic fluctuations in USD/JPY.⑷ The catalyst is the improved outlook for the US-Iran agreement, which has subdued previously risk-averse sentiment that supported demand for options. The risk of disorderly breakouts in either direction is being re-evaluated by the market.⑸ For USD/JPY to surge significantly, sustained risk aversion driving the dollar higher or the failure of Bank of Japan intervention would be required. A sharp reversal lower is always possible due to the threat of intervention; now, easing geopolitical tensions have made both scenarios less urgent.⑹ With the Bank of Japan's policy decision approaching on Tuesday, the overnight implied volatility for USD/JPY remains at historically low levels, meaning the market may be significantly underestimating the risks posed to the current exchange rate by the Bank of Japan.