Category: Commodities

  • NY Session Tactical Brief – Thursday, 18 June

    Regime: Risk-on relief dominates the session as a landmark Iran peace deal and the reopening of the Strait of Hormuz collapse energy prices, completely overshadowing hawkish Fed undertones and driving equity futures sharply higher while the DXY consolidates near 100.60 and the VIX drifts to 16.41.

    Today’s market themes:

    • Geopolitical supply shock as the reopening of the Strait of Hormuz collapses Brent crude below $78/bbl.
    • Hawkish monetary policy holds as the Bank of England delivers a surprise 7-2 vote split to keep rates at 3.75%.
    • Global equity relief rally with Nikkei closed at a record 71,053 and Nasdaq 100 futures surging 2.0% premarket.

    The setup: The interim US-Iran agreement is a massive supply-side relief trade, crushing oil prices and functioning as a powerful global disinflation shock. This collapse in crude offsets the hawkish Fed positioning introduced by Warsh, allowing US 10Y yields to ease to 4.43% and sparking a violent short squeeze in equity futures. We are buying the Nasdaq dip at 18,950 and shorting Brent rallies toward $79.80, expecting the disinflation narrative to ultimately weigh on the USD.

    Watch list (native time per event):

    • 09:30 CET CHF: SNB Policy Rate Decision (Actual: 0.00% / Forecast: 0.00%)
    • 12:00 BST GBP: Bank of England Rate Decision (Actual: 3.75% / Forecast: 3.75% / Vote: 7-2)
    • 10:00 CET CHF: SNB Press Conference (Monetary Policy Assessment)

    Bias by asset:

    • DXY:
      • Direction: Consolidating.
      • Domestic (US): Supported by hawkish Fed transition (Warsh) despite easing US 10Y yield to 4.43%.
      • Cross: Supported by heavy EUR and JPY; capped by global equity risk-on relief.
      • Levels: Support 100.10 / Resistance 101.20
    • EUR/USD:
      • Direction: Consolidating heavy.
      • Domestic (EU): Stable ECB wage tracker confirms steady domestic disinflation, limiting euro upside.
      • Cross: Drifting near 1.1475 as firm DXY offsets broader risk-on equity relief.
      • Levels: Support 1.1420 / Resistance 1.1510
    • GBP/USD (Cable):
      • Direction: Bearish.
      • Domestic (UK): BoE kept rates at 3.75% with surprisingly hawkish 7-2 vote split.
      • Cross: Heavy near 1.3204 as DXY strength dominates despite Gilt yield support.
      • Levels: Support 1.3180 / Resistance 1.3250
    • USD/JPY:
      • Direction: Bullish.
      • Domestic (JP): Record low real yields keep JPY weak; market on high intervention watch.
      • Cross: Grinding higher to 161.85, propelled by resilient US Treasury yields.
      • Levels: Support 161.00 / Resistance 162.50
    • USD/CAD (Loonie):
      • Direction: Consolidating.
      • Domestic (CA): Firm BoC restrictive bias supports CAD; oil plunge limits domestic gains.
      • Cross: Consolidating near 1.4100 as DXY strength fights the commodity drag.
      • Levels: Support 1.4050 / Resistance 1.4180
    • AUD/USD (Aussie):
      • Direction: Consolidating.
      • Domestic (AU): Defending 0.7000 on RBA restrictive cash rate and Bullock’s sticky inflation warnings.
      • Cross: Vulnerable to copper’s fall, but supported by global risk-on premarket equity surge.
      • Levels: Support 0.6970 / Resistance 0.7040
    • NZD/USD (Kiwi):
      • Direction: Consolidating bearish.
      • Domestic (NZ): Capped at 0.578 by RBNZ’s firm easing bias following April’s cut.
      • Cross: Dragged lower by strong DXY despite positive risk sentiment in futures.
      • Levels: Support 0.5730 / Resistance 0.5820
    • USD/CHF (Swissy):
      • Direction: Consolidating.
      • Domestic (CH): SNB held policy rate steady at 0.00% today, stabilizing Swiss yields.
      • Cross: Consolidating near 0.8800 as safe-haven demand eases on Iran peace deal.
      • Levels: Support 0.8750 / Resistance 0.8850
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP bearish; EUR/JPY bearish; GBP/JPY consolidating.
      • Domestic: Hawkish BoE 7-2 hold outpaces ECB’s wage-led easing bias; JPY remains heavily depressed.
      • Cross: Driven by strong risk-on equity relief flows offsetting direct DXY impact.
      • Levels: EUR/GBP 0.8400 / EUR/JPY 185.20 / GBP/JPY 214.00
    • XAU (Gold):
      • Direction: Bullish.
      • Domestic (asset-specific): Supported by falling global real yields (2.14%) and central bank buying.
      • Cross: Reclaimed the handle to trade at $4,305/oz despite firm DXY.
      • Levels: Support $4,280 / Resistance $4,350
    • XAG (Silver):
      • Direction: Bullish.
      • Domestic (asset-specific): Lifted by positive global industrial demand prospects as supply fears ease.
      • Cross: Trading higher alongside Gold, brushing off short-term DXY strength.
      • Levels: Support $29.50 / Resistance $31.20
    • WTI / Brent:
      • Direction: Bearish.
      • Domestic (asset-specific): Hormuz reopening releases massive wave of supply; Brent breaks below $78.
      • Cross: Under severe pressure as risk-on shifts capital from energy to equities.
      • Levels: WTI Support $73.50 / Brent Resistance $79.80
    • Copper:
      • Direction: Bearish.
      • Domestic (asset-specific): China growth concerns and rising LME inventories weigh heavily on sentiment.
      • Cross: Plunged as hawkish Fed offsets broader global risk-on equity relief trade.
      • Levels: Support $4.30 / Resistance $4.55
    • SPX:
      • Direction: Bullish.
      • Domestic (US): Futures up 1.0% near 5,475, rebounding on Hormuz supply relief.
      • Cross: Risk-on sentiment dominates cash open, ignoring earlier hawkish Fed rhetoric.
      • Levels: Futures 5,475 / Cash resistance 5,500
    • NDX:
      • Direction: Bullish.
      • Domestic (US): Futures surge 2.0% premarket, reclaiming FOMC losses on growth relief.
      • Cross: High rate sensitivity triggers massive squeeze as oil-led disinflation lowers yields.
      • Levels: Futures 18,950 / Resistance 19,200
    • US30 (Dow):
      • Direction: Bullish.
      • Domestic (US): Dow futures up 0.7% near 39,220 on cyclical relief.
      • Cross: Rising on positive global risk tone, ignoring bond yield stability.
      • Levels: Futures 39,220 / Support 38,900
    • UK100 (FTSE):
      • Direction: Bearish.
      • Domestic (UK): Trading down 1.1% near 8,210 as market digests hawkish BoE.
      • Cross: Slumping on heavy commodity exposure despite strong US premarket equity tone.
      • Levels: Support 8,180 / Resistance 8,280
    • DAX:
      • Direction: Bullish.
      • Domestic (DE): Broke 25,000 to record highs, supported by confirmed stable wage pressures.
      • Cross: Ignored DXY strength, riding the wave of US tech premarket gains.
      • Levels: Support 24,900 / Resistance 25,200
    • Nikkei:
      • Direction: Bullish.
      • Domestic (JP): Surged 1.65% to record 71,053 on energy import reliance relief.
      • Cross: Strongly supported by US tech futures rebound and weak JPY.
      • Levels: Support 70,200 / Resistance 71,500
    • BTC:
      • Direction: Bearish.
      • Domestic (asset-specific): Sliding back to $66,200 on rising net long positioning liquidation.
      • Cross: Underperforming global risk-on assets as capital rotates directly into equities.
      • Levels: Support $65,500 / Resistance $67,800

    Positioning watch: Speculator positioning shows a heavily crowded dollar long (81%ile) and crowded Nasdaq short (10%ile), setting up a high-probability squeeze risk on tech if US Treasury yields continue to ease. Copper longs are also vulnerable at the 92nd percentile, exposing bulls to liquidation on any growth disappointment.

    The pain trade: A violent, sustained continuation of the Nasdaq short-squeeze past 19,200, which would severely punish macro funds still positioned net-short equities while forcing a rapid unwinding of crowded USD longs.

  • NY Session Tactical Brief – Thursday, 18 June

    Regime: Highly risk-on across global equities but sharply risk-off across energy, as the dramatic de-escalation of physical supply risks following an interim US-Iran agreement to reopen the Strait of Hormuz triggers an oil collapse and a massive stock relief rally, while the VIX steadies near 16.41.

    Today’s market themes:

    • Theme 1: Geopolitical de-escalation as the landmark US-Iran agreement to reopen the Strait of Hormuz collapses the physical oil supply risk premium and ignites a major global equity relief surge.
    • Theme 2: Central bank policy divergence after the Bank of England held its Bank Rate at 3.75% and the SNB maintained 0.00%, reinforcing yield disparities.
    • Theme 3: Post-FOMC recovery in US equity futures, with Nasdaq 100 futures erasing yesterday’s slide ahead of the NY cash open.

    The setup: The sudden removal of the Middle East energy risk premium dominates macro flows ahead of the New York open, sending WTI tumbling below $75 and Brent below $78, which has unleashed massive global relief buying in energy-importing stock indices. Concurrently, the Bank of England’s 1-0-8 vote to maintain the Bank Rate at 3.75% has failed to sustain Cable, which is flushing toward the 1.3200 level as the broader US Dollar Index holds firm at 100.6 post-FOMC. We are buyers of the stock market recovery, particularly Nasdaq front-month futures as they gap up 2.0%, while playing structural USD strength against defensive currencies like the Kiwi and Euro.

    Watch list (native time per event):

    • 09:30 CET CHF: SNB Policy Rate Assessment (actual 0.00% vs 0.00% forecast)
    • 12:00 BST GBP: Bank of England Official Bank Rate (actual 3.75% vs 3.75% forecast)
    • 12:00 BST GBP: MPC Official Bank Rate Votes (actual 1-0-8 vs 1-0-8 forecast)

    Bias by asset:

    • DXY:
      • Direction: Bullish.
      • Domestic (US): Post-FOMC hawkish bias remains intact alongside elevated treasury yields.
      • Cross: Safe-haven flows ease but yield advantages over European peers sustain DXY strength.
      • Levels: Support 100.20 / Resistance 101.10.
    • EUR/USD:
      • Direction: Bearish.
      • Domestic (EU): ECB cautious easing bias reinforced after wage tracker confirmed stable negotiated wage pressures.
      • Cross: DXY firming post-FOMC drags the pair below the pivotal 1.1500 level.
      • Levels: Support 1.1450 / Resistance 1.1520.
    • GBP/USD (Cable):
      • Direction: Bearish.
      • Domestic (UK): BoE kept rate at 3.75%, keeping data-dependent stance but offering no hawkish surprise.
      • Cross: Firm DXY post-FOMC pushes Cable to flush toward the 1.3200 handle.
      • Levels: Support 1.3180 / Resistance 1.3260.
    • USD/JPY:
      • Direction: Bullish.
      • Domestic (JP): Wage growth remains modest, keeping BoJ cautious and JGB yields heavily capped.
      • Cross: US 10Y yield consolidation at 4.43% supports the pair near 157.80.
      • Levels: Support 157.20 / Resistance 158.50.
    • USD/CAD (Loonie):
      • Direction: Bullish.
      • Domestic (CA): Falling oil prices weaken CAD, testing BoC’s capacity to maintain easing cycle.
      • Cross: DXY strength pushes the pair toward a seven-month high near 1.4100.
      • Levels: Support 1.4020 / Resistance 1.4120.
    • AUD/USD (Aussie):
      • Direction: Bullish.
      • Domestic (AU): RBA remains reluctant to commit to rate cuts while services inflation is sticky.
      • Cross: Risk-on sentiment and China equity gains provide strong offset to firm DXY.
      • Levels: Support 0.6970 / Resistance 0.7050.
    • NZD/USD (Kiwi):
      • Direction: Bearish.
      • Domestic (NZ): RBNZ easing bias remains firmly intact as domestic growth outlook deteriorates.
      • Cross: Stronger DXY keeps the defensive pair capped near the 0.578 level.
      • Levels: Support 0.5750 / Resistance 0.5820.
    • USD/CHF (Swissy):
      • Direction: Bullish.
      • Domestic (CH): SNB held policy rate unchanged at 0.00%, limiting Swiss Franc downside.
      • Cross: Firm DXY post-FOMC keeps the pair well bid near 0.8000.
      • Levels: Support 0.7950 / Resistance 0.8050.
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP Bearish, EUR/JPY Bearish, GBP/JPY Bullish.
      • Domestic: BoE hold at 3.75% versus ECB 2.50% wage-capped stance supports Sterling yields.
      • Cross: Risk-on flows favor GBP over EUR while JPY remains the global underperformer.
      • Levels: EUR/GBP 0.8390 / EUR/JPY 180.50 / GBP/JPY 208.50.
    • XAU (Gold):
      • Direction: Bullish.
      • Domestic (asset-specific): Falling global real yields and robust central bank gold purchases provide structural support.
      • Cross: Strong safe-haven bid offsets firm DXY, keeping spot gold above 4,300.
      • Levels: Support 4,280 / Resistance 4,325.
    • XAG (Silver):
      • Direction: Bullish.
      • Domestic (asset-specific): Strong industrial demand expectations support silver as global equity sentiment surges.
      • Cross: Recovering gold prices and global risk-on flows lift silver despite firm DXY.
      • Levels: Support 30.50 / Resistance 31.80.
    • WTI / Brent:
      • Direction: Bearish.
      • Domestic (asset-specific): Reopening of Strait of Hormuz completely eliminates physical oil supply risk premium.
      • Cross: Global equity risk-on fails to cushion oil as supply risk premium evaporates.
      • Levels: WTI Support 73.50 / Brent Resistance 79.00.
    • Copper:
      • Direction: Bullish.
      • Domestic (asset-specific): China infrastructure stimulus expectations and tight LME stocks support physical copper pricing.
      • Cross: Surging global risk appetite and equity futures fuel massive short covering.
      • Levels: Support 4.40 / Resistance 4.65.
    • SPX:
      • Direction: Bullish.
      • Domestic (US): Futures up 1.0% as market rapidly unwinds yesterday’s post-FOMC panic.
      • Cross: Consolidating VIX at 16.41 signals robust risk appetite ahead of NY open.
      • Levels: Futures 5,450 / Cash Support 5,410 / Resistance 5,480.
    • NDX:
      • Direction: Bullish.
      • Domestic (US): Mega-cap tech futures surge 2.0% as AI-related flow resumes dominance.
      • Cross: Erasing post-FOMC slide points to a massive gap-up at NY open.
      • Levels: Futures 19,800 / Support 19,650 / Resistance 19,950.
    • US30 (Dow):
      • Direction: Bullish.
      • Domestic (US): Futures rise 0.7% as industrial and cyclical earnings expectations stabilize.
      • Cross: Yield consolidation at 4.43% supports rotation back into value stocks.
      • Levels: Futures 39,150 / Support 38,900 / Resistance 39,300.
    • UK100 (FTSE):
      • Direction: Bearish.
      • Domestic (UK): Tumbled 1.0% as heavy commodity weighting and strong Sterling weigh index down.
      • Cross: Underperforming global peer indices despite strong NY equity futures lead.
      • Levels: Support 8,150 / Resistance 8,280.
    • DAX:
      • Direction: Bullish.
      • Domestic (DE): Clearing 25,000 level driven by stabilizing negotiated wage pressures across Europe.
      • Cross: Strong US tech lead and global risk-on fuel structural breakout.
      • Levels: Support 24,900 / Resistance 25,150.
    • Nikkei:
      • Direction: Bullish.
      • Domestic (JP): Massive domestic relief on lower energy import costs after Hormuz agreement.
      • Cross: Surged 1.65% to record 71,053 led by global risk-on and cheap yen.
      • Levels: Support 70,100 / Resistance 71,300.
    • BTC:
      • Direction: Bearish.
      • Domestic (asset-specific): Spot ETF outflows and high funding rates pressure prices toward $66,200.
      • Cross: Diverging from equity strength as USD liquidity remains highly restrictive.
      • Levels: Support 65,800 / Resistance 67,500.

    Positioning watch: CFTC data exposes severe crowded shorts in the Japanese Yen (0%ile), S&P 500 (6%ile), and Nasdaq (10%ile) which face immediate upside short-squeeze risks, while the US Dollar (81%ile) and Copper (92%ile) represent heavily crowded longs highly vulnerable to liquidation on sudden trend reversals.

    The pain trade: The pain trade is a sharp reversal higher in crude oil sparked by any disruption to the US-Iran interim agreement, which would instantly crush the global equity relief rally and catch crowded equity longs off guard.

  • WTI Sinks on Hormuz Reopening – Thursday, 18 June

    Snapshot: WTI Crude has plunged below $75 per barrel, hitting its lowest level since early March, as a landmark US-Iran agreement paves the way to reopen the critical Strait of Hormuz. This massive physical supply shock completely overrides yesterday’s economic projections from the FOMC, turning all eyes to the 08:30 ET Philly Fed and Jobless Claims data to assess the demand floor.

    • Physical flows are already recovering as Saudi crude and LNG tankers resume transit, which will quickly replenish global balances even with Cushing inventories currently tight at 20 million barrels.
    • While net-long positioning is only modest at +130,301 contracts (52nd percentile), any weakness in the 08:30 ET US macro prints will trigger further systematic liquidations.

    Bias into NY: Bearish, targeting a clean break of $74.00. The massive return of Persian Gulf supply is the dominant narrative, and a softer dollar index at 119.51 will do little to cushion this physical liquidation.

  • Gold Reclaims $4,300 on Softening Real Yields – Thursday, 18 June

    Where we are: Gold is staging a solid recovery in early European trading, reclaiming the key $4,300 pivot to print at $4,308/oz as we approach the New York open. This push higher retraces a significant portion of Wednesday’s 2% sell-off, which was triggered by the Fed’s hawkish-leaning economic projections and Chair Warsh’s firm stance on inflation. Technically, bullion found reliable support in the $4,260 region overnight, stabilizing as the market absorbed the details of the US-Iran interim agreement. We see the immediate intraday bias tilted to the upside as the market looks to consolidate yesterday’s overextended downside move.

    What’s driving it: The primary impulse behind today’s bid is a renewed softening in real yields, with the US 10Y TIPS slipping 1.0bp to 2.14% to provide an immediate tailwind for non-yielding assets. This domestic driver is being amplified by a broader drop in nominal 10-year US Treasury yields to 4.43% and a 0.51% slide in the Broad USD Index. While the US-Iran agreement to reopen the Strait of Hormuz initially stripped out some geopolitical war premium and sent crude oil down 4.48%, underlying safe-haven architecture remains highly supportive of bullion. This structural bid is further underscored by the Swiss National Bank’s warning today that it stands ready for FX intervention to curb Swiss franc strength, reminding macro allocators of lingering European safe-haven demand.

    • US 10Y Real Yields (TIPS) have eased back to 2.14%, acting as a direct transmission mechanism to lift bullion from its Wednesday lows.
    • The hawkish June 16-17 FOMC projections and Chair Warsh’s warning on sticky inflation shook out weak momentum longs, leaving the market structurally healthier.
    • CFTC speculator positioning shows net non-commercial longs at a modest 173,837 contracts—sitting in just the 33rd percentile of the 52-week range—indicating clean positioning and a total absence of near-term long-squeeze risk.

    NY session focus: For the New York session, the primary focus is on the 08:30 ET double-header of the Philly Fed Manufacturing Index (forecast 9.8) and weekly Unemployment Claims (forecast 225K). A softer-than-expected claims print will accelerate the decline in real yields, clearing the path for XAU/USD to test resistance at $4,325, while a hot manufacturing index could test buyers’ resolve back down to the $4,285 support level. The trade that is working is buying intraday dips toward $4,300 with tight stops, while late-session momentum selling is highly at risk of getting caught in a short squeeze. The ultimate pain trade is a clean break back above yesterday’s pre-FOMC highs near $4,340, which would force macro funds to aggressively rebuild their long exposure.

  • Bullion Reclaims $4,300 on Hormuz Peace Deal – Thursday, 18 June

    Where we are: Bullion has reclaimed the handle, trading at $4,305/oz as the European session transitions to New York. Spot gold has recovered nearly all of Wednesday’s 2% post-FOMC sell-off, bouncing off an overnight low of $4,272/oz to trade well above yesterday’s NY close. Technical support at $4,265/oz held firm during the Asian session, and we are now testing the intraday pivot at $4,310/oz. This leaves the metal poised to challenge the weekly highs if New York momentum sustains the bid.

    What’s driving it: A supportive real-yield backdrop is leading the recovery, with US 10Y TIPS yields ticking down 1.0bp to 2.14% to provide an underlying tailwind for non-yielding assets. This real-rate relief is working in tandem with a dramatic unwind of geopolitical risk premiums following the signing of an interim deal to reopen the Strait of Hormuz, triggering a short-covering bid in European cash. While yesterday’s hawkish FOMC projections and Fed Chair Warsh’s emphasis on sticky inflation initially sparked a 2% liquidation, the clean positioning backdrop has prevented any sustained downside follow-through. A weaker US dollar, down 0.51% on the broad index, is further amplifying these gold-specific inflows as European trading desks rebuild long exposure.

    • US 10Y real yields easing to 2.14% alongside a 3.0bp contraction in 10Y breakeven inflation to 2.26%, creating a favorable entry point for real-rate allocators.
    • The US-Iran interim agreement to reopen the Strait of Hormuz, which has paradoxically fueled a relief rally in physical assets as broader market risk sentiment stabilizes.
    • Underallocated speculative positioning, with net non-commercial longs at just the 33rd percentile (+173,837 contracts), leaving the market structurally light and highly sensitive to upside squeezes.

    NY session focus: The immediate directional trigger rests on the 08:30 ET double-header of Philly Fed Manufacturing (forecast 9.8) and Unemployment Claims (forecast 225K), where any soft print will accelerate the decline in real yields and turbocharge the metal’s recovery. We are watching the pivot at $4,310/oz; a clean break on the 08:30 ET data opens the door for a rapid run to $4,325/oz, while a hot print risks a retest of the $4,280/oz floor. The trade that is working is buying intraday pullbacks toward $4,295/oz, whereas holding short positions in anticipation of Fed-driven downside is highly vulnerable given the light positioning. The pain trade is a violent short squeeze through $4,330/oz if soft US data forces the street to price out the Fed’s hawkish June dot-plot shift.

  • Brent Crude Plummets Under 78 as Hormuz Reopens – Thursday, 18 June

    Snapshot: Brent crude has plunged below $78 per barrel, hitting its lowest level since early March, as a breakthrough US-Iran interim agreement begins to restore normal shipping flows through the Strait of Hormuz. This massive supply normalization is offset only slightly by tight physical buffers, with the US Strategic Petroleum Reserve inventory plumbing its lowest level since 1983. Today’s focus shifts to the macro demand outlook with the Philly Fed and jobless claims at 08:30 ET following yesterday’s FOMC updates.

    • The key operational signal is the resumption of Saudi oil and LNG tankers departing the Persian Gulf, paving the way for millions of barrels of shut-in capacity from Saudi Arabia, the UAE, and Iraq to return to the global market.
    • We watch for structural support near current levels as Cushing storage remains critically tight at approximately 20 million barrels, leaving shorts vulnerable to physical squeezes if US demand metrics surprise to the upside.

    Bias into NY: Our bias remains tactically bearish toward $76.50 as Hormuz supply flows resume, though further downside could be cushioned if US yields continue their downward trajectory post-FOMC, keeping the dollar on the back foot.

  • Crude Plummets Below $75 as Hormuz Reopens – Thursday, 18 June

    Snapshot: US Crude has plunged below the $75 per barrel mark to its lowest level since March, as an interim US-Iran agreement to reopen the Strait of Hormuz triggers a massive supply-side relief trade. This structural supply normalization completely overrides yesterday’s hawkish economic projections from the FOMC, with physical flows returning as Saudi and LNG tankers resume transit. Traders are now prepping for US demand signals via the 08:30 ET Philly Fed and Jobless Claims prints.

    • Cushing inventories remain critical at just 20 million barrels, providing a tight physical backstop that should limit further near-term downside below $73.50.
    • A hotter-than-expected Philly Fed print at 08:30 ET poses the risk of a dollar-driven squeeze, forcing further liquidation from the modestly long +130k spec cohort.

    Bias into NY: Bearish below $75.00 targeting $73.50, as the resumption of Gulf shipping flows dominates the tape, though a soft US 10Y real yield at 2.14% may cushion the broader descent.

  • Crude Slumps Below $75 as Hormuz Reopens – Thursday, 18 June

    Snapshot: WTI crude has tumbled below $75 per barrel, its lowest level since early March, as supply-side risk premium evaporates following an interim US-Iran agreement to reopen the Strait of Hormuz. Reopening this Persian Gulf artery clears the way for Saudi Arabia, the UAE, and Iraq to restart millions of barrels of sidelined capacity. Ahead of the New York open, the market is looking to the 08:30 ET Philly Fed and Jobless Claims data to gauge demand-side resilience following yesterday’s FOMC policy updates.

    • Physical tightness provides a structural floor, with Cushing inventories sitting near 20 million barrels, suggesting physical buyers will emerge if prices approach $73.00.
    • The near-term risk is a demand-side flush during the NY session if the 08:30 ET Jobless Claims print softer than the 225k forecast, which would amplify today’s supply shock.

    Bias into NY: We are tactically bearish targeting a test of $73.50, as the return of Persian Gulf supply dominates the tape, though a softer US dollar index at 119.50 should limit a total collapse. We prefer selling rallies up to $76.20.

  • Brent Crude Plunges Below $78 on Hormuz Breakthrough – Thursday, 18 June

    Snapshot: Brent crude has broken key support to trade below $78 per barrel, hitting its lowest level since early March after an interim US-Iran agreement paved the way to reopen the Strait of Hormuz. This massive geopolitical breakthrough unlocks millions of barrels of sidelined Gulf capacity, completely overshadowing tight physical storage indicators. Today’s secondary macro inputs come from the Philly Fed and weekly jobless claims at 08:30 ET.

    • Supply flood vs. tight inventories: The return of Saudi, UAE, and Iraqi flows through Hormuz drives the spot capitulation, even though physical realities remain exceptionally tight with Cushing stocks down to 20 million barrels and US SPR inventories at their lowest level since 1983.
    • Policy digestion: Crude is failing to find a floor despite yesterday’s FOMC economic projections and a softer US Dollar Broad Index at 119.51, proving that local supply dynamics are firmly in the driver’s seat.

    Bias into NY: We are bearish into the New York open, targeting a test of the $76.50 support level as shipping activity accelerates, while keeping an eye on the 08:30 ET US data for any temporary demand-driven short-covering.

  • NY Session Tactical Brief – Thursday, 18 June

    Regime: Highly risk-on as global equity futures rally sharply, supported by a plunge in energy prices and a stable VIX at 16.41, which offsets yesterday’s hawkish FOMC debut by Governor Warsh.

    Today’s market themes:

    • Geopolitical de-escalation as the landmark US-Iran Strait of Hormuz agreement triggers a major crude supply shock.
    • Central bank divergence following the Bank of England’s 7-2 hold at 3.75% and the Swiss National Bank’s steady 0.00% pause.
    • Global equity outperformance led by energy-importing jurisdictions as input costs collapse.

    The setup: The landmark interim agreement to reopen the Strait of Hormuz has completely shifted the near-term macro landscape, sending Brent crude crashing below $78/bbl and driving a massive relief rally in global equities. US Nasdaq futures are up 2.0% as the market completely shrugs off hawkish Fed debutant Warsh, while the US Dollar Index holds firm at 100.60. We lean long high-beta equities and short oil, utilizing the capitulating Yen as the preferred funding leg for cross-asset carry play.

    Watch list (native time per event):

    • 07:00 BST: GBP Claimant Count Change (forecast 25.8K, prior 26.5K)
    • 09:30 CET: CHF SNB Policy Rate (forecast 0.00%, actual 0.00%)
    • 12:00 BST: GBP BoE Official Bank Rate (forecast 3.75%, actual 3.75%, voted 7-2)

    Bias by asset:

    • DXY:
      • Direction: Bullish bias
      • Domestic (US): Hawkish Fed transition under Governor Warsh and elevated yields support greenback.
      • Cross: Supported by safe-haven unwinds in European currencies and weaker commodity complexes.
      • Levels: Support 100.20 / Resistance 101.00
    • EUR/USD:
      • Direction: Bearish bias
      • Domestic (EU): Stable negotiated wage growth dampens ECB urgency for rapid interest rate cuts.
      • Cross: Stronger DXY and widening US-DE 10Y yield spread keep spot capped.
      • Levels: Support 1.1420 / Resistance 1.1500
    • GBP/USD (Cable):
      • Direction: Bearish bias
      • Domestic (UK): BoE votes 7-2 to hold rates at 3.75% with dovish dissent.
      • Cross: DXY strength and widening US-UK yield differential force spot below 1.3200.
      • Levels: Support 1.3150 / Resistance 1.3250
    • USD/JPY:
      • Direction: Bullish bias
      • Domestic (JP): Ultra-low JGB yields and lack of BoJ intervention drive yen capitulation.
      • Cross: US 10Y yield at 4.43% and firm DXY accelerate spot breakout.
      • Levels: Support 158.50 / Resistance 161.00
    • USD/CAD (Loonie):
      • Direction: Bullish bias
      • Domestic (CA): Softening domestic inflation expectations bolster Bank of Canada rate cut pricing.
      • Cross: Plunging crude prices and firm DXY push spot to seven-month highs.
      • Levels: Support 1.4020 / Resistance 1.4150
    • AUD/USD (Aussie):
      • Direction: Bullish bias
      • Domestic (AU): RBA maintains hawkish bias due to sticky domestic services CPI inflation.
      • Cross: Risk-on sentiment and steady Chinese growth proxies offset broad DXY strength.
      • Levels: Support 0.6960 / Resistance 0.7050
    • NZD/USD (Kiwi):
      • Direction: Bearish bias
      • Domestic (NZ): RBNZ maintains clear easing bias following April’s 25bp rate cut.
      • Cross: Underperforming Aussie on cross-play while DXY pressure keeps upside capped.
      • Levels: Support 0.5730 / Resistance 0.5820
    • USD/CHF (Swissy):
      • Direction: Neutral bias
      • Domestic (CH): SNB holds policy rate steady at 0.00% matching market expectations.
      • Cross: DXY consolidation and safe-haven outflow unwind limit CHF recovery.
      • Levels: Support 0.8750 / Resistance 0.8850
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): Bearish EUR/GBP, Bullish EUR/JPY, Bullish GBP/JPY
      • Domestic: BoE 7-2 hold outweighs stable ECB wage data and ultra-dovish BoJ.
      • Cross: Risk-on sentiment fuels yen-cross upside, overriding nominal DXY consolidation.
      • Levels: EUR/GBP 0.8400 / EUR/JPY 171.00 / GBP/JPY 225.00
    • XAU (Gold):
      • Direction: Bullish bias
      • Domestic (asset-specific): Falling global real yields and central bank purchases provide fundamental support.
      • Cross: De-escalation flows cap gains as safe-haven premium unwinds into DXY.
      • Levels: Support $4,280 / Resistance $4,350
    • XAG (Silver):
      • Direction: Bullish bias
      • Domestic (asset-specific): Industrial demand expectations recover on global manufacturing and energy cost relief.
      • Cross: Gold-silver ratio compresses as high-beta silver outperforms under risk-on DXY.
      • Levels: Support $29.50 / Resistance $31.20
    • WTI / Brent:
      • Direction: Bearish bias
      • Domestic (asset-specific): Strait of Hormuz reopening releases massive physical oil supply to market.
      • Cross: Risk-on equity bounce fails to offset deep sector-specific liquidation.
      • Levels: Brent Support $75.00 / WTI Support $72.50
    • Copper:
      • Direction: Bearish bias
      • Domestic (asset-specific): Soft physical demand in China and rising warehouse stocks weigh.
      • Cross: Stronger DXY and post-FOMC real rate pricing pressure global growth proxies.
      • Levels: Support $4.35 / Resistance $4.55
    • SPX:
      • Direction: Bullish bias
      • Domestic (US): Hawkish Fed digested as corporate earnings bid provides cushion.
      • Cross: VIX steady at 16.41 while global risk-on flow supports futures.
      • Levels: Futures 5,450 / Cash Resistance 5,500
    • NDX:
      • Direction: Bullish bias
      • Domestic (US): Mega-cap tech earnings power strong bid despite Warsh’s hawkish tone.
      • Cross: Erasing post-FOMC decline as high-beta flows return; VIX stays subdued.
      • Levels: Futures 19,800 / Resistance 20,100
    • US30 (Dow):
      • Direction: Bullish bias
      • Domestic (US): Cyclical stocks benefit from lower energy costs boosting operating margins.
      • Cross: Stabilizing 10Y yields at 4.43% encourage rotation back into industrials.
      • Levels: Futures 39,100 / Resistance 39,500
    • UK100 (FTSE):
      • Direction: Bearish bias
      • Domestic (UK): High concentration of oil supermajors drags index on crude plunge.
      • Cross: Underperforming European peers due to commodity slump and firmer Gilt yields.
      • Levels: Support 8,100 / Resistance 8,250
    • DAX:
      • Direction: Bullish bias
      • Domestic (DE): Clear of 25,000 handle on highly constructive domestic inflation outlook.
      • Cross: Energy cost relief boosts European manufacturing sentiment, lifting cyclical equities.
      • Levels: Support 24,900 / Resistance 25,250
    • Nikkei:
      • Direction: Bullish bias
      • Domestic (JP): Plunging import energy costs trigger massive relief rally for corporate Japan.
      • Cross: Ultra-weak Yen and global risk-on push index to record 71,053.
      • Levels: Support 70,000 / Resistance 71,500
    • BTC:
      • Direction: Bearish bias
      • Domestic (asset-specific): Sluggish ETF inflows and rising spot liquidations cap upside momentum.
      • Cross: Fails to participate in equity risk-on as DXY remains elevated.
      • Levels: Support $65,500 / Resistance $67,500

    Positioning watch: Speculator positions in the US Dollar (81st percentile long), Copper (92nd percentile long), and Bitcoin (98st percentile long) face extreme liquidation risk if US yields turn. Conversely, the heavily shorted Japanese Yen (0th percentile) and S&P 500 (6th percentile) are highly primed for aggressive short-squeezes.

    The pain trade: An unexpected, sharp downward break in the US Dollar Index that triggers a violent, coordinate short-squeeze across the massive speculator net-short positions in the Japanese Yen and Sterling.

  • Gold Reclaims 4,300 as Geopolitical Relief Counters Hawkish Fed – Thursday, 18 June

    Where we are: Gold is trading just above the $4,300 level, staging a solid recovery after Wednesday’s sharp 2% sell-off. The yellow metal found strong support overnight near the $4,280 region, clawing back yesterday’s Fed-induced losses to trade firmly in positive territory as the European session progresses. We are watching the $4,315 resistance level closely, which represents the pre-FOMC pivot point, with the intraday tone decidedly bid ahead of the New York cash open.

    What’s driving it: The structural tailwind from falling real yields is reasserting itself, with the US 10Y TIPS yield drifting down to 2.14%, reducing the opportunity cost of holding non-yielding bullion. This underlying support is clashing with geopolitical developments as President Trump’s interim agreement to reopen the Strait of Hormuz initially dented crude oil, yet the broader relief and removal of Iranian sanctions are paradoxically fueling an asset-allocation bid back into precious metals. While the FOMC’s hawkish tone yesterday initially dented sentiment, the market is viewing the post-Fed dip as a buying opportunity given the modest speculative positioning. This resilient tone is being amplified by the broader dollar index slipping 0.51% to 119.50 and US 10-year Treasury yields easing 4 basis points to 4.43%.

    • US 10-year real yields (TIPS) easing to 2.14% (-1.0bp d/d) provides a structural floor for bullion against hawkish Federal Reserve projections.
    • The signing of the US-Iran interim peace agreement and reopening of the Strait of Hormuz has triggered a rotation out of crude oil (-4.48%) and into gold as sanctions lift.
    • CFTC speculative positioning is remarkably clean at +173,837 contracts, sitting at just the 33rd percentile of its 52-week range, indicating significant dry powder to chase a break higher.

    NY session focus: All eyes now turn to the 08:30 ET data double-header, where the Philly Fed Manufacturing Index (expected at 9.8) and weekly Unemployment Claims (expected at 225k) will dictate the immediate direction of US yields. A softer-than-expected claims print will likely fuel the real yield compression trade, clearing the path for XAU/USD to test the key psychological $4,330 level. The trade that is working is buying intraday pullbacks to $4,285, while the risk lies in a hot Philly Fed print prompting a hawkish repricing of the Fed’s terminal rate. The pain trade for the street is a rapid squeeze back toward $4,350 as under-allocated macro funds scramble to rebuild longs.

  • Brent Crude Collapses as Strait of Hormuz Reopens – Thursday, 18 June

    Snapshot: Brent crude has plummeted below $78 per barrel, hitting its lowest level since early March as physical supply risks dissolve following a breakthrough interim US-Iran agreement to reopen the Strait of Hormuz. This massive supply normalization completely overrides yesterday’s FOMC economic projections, with traders now pivoting to the demand-side implications of today’s 08:30 ET US economic releases.

    • The resumption of shipping through the Persian Gulf threatens to rapidly unlock millions of barrels of sidelined Saudi, UAE, and Iraqi capacity, though downside is partially cushioned by tight domestic stockpiles, with Cushing at 20 million barrels and the US Strategic Petroleum Reserve at its lowest since 1983.
    • Technical momentum is heavily bearish following a 38% decline from the April peak, meaning any weakness in the 08:30 ET Philly Fed manufacturing or jobless claims data will likely accelerate the spot sell-off.

    Bias into NY: We are structurally bearish into the New York open, targeting a break toward $76.20 as physical Gulf flows resume, with a softer US broad dollar index of 119.5073 offering only minor, secondary support to the contract.

  • Hormuz Breakthrough Drags Crude Below $75 – Thursday, 18 June

    Snapshot: Crude oil has plunged below $75 per barrel to multi-month lows, driven by the landmark US-Iran interim agreement that is rapidly reopening the Strait of Hormuz. This massive supply normalization completely overshadows yesterday’s FOMC policy update, shifting immediate focus to the 08:30 ET Philly Fed and jobless claims data for domestic demand cues.

    • Physical tight spots like Cushing inventories falling to 20 million barrels are being ignored as CFTC data shows speculators actively cutting net longs by 25,573 contracts, signaling a shift in positioning momentum.
    • The primary risk for the NY session is a clean break below $74.20 if US manufacturing data underperforms, which would accelerate speculative liquidations.

    Bias into NY: We favor selling rallies with a target of $73.80 as Iranian supply return expectations dominate, though a softer US Dollar Index at 119.5073 and falling real yields may cushion the absolute floor.

  • Iran Deal Drags Brent Below $78 Support – Thursday, 18 June

    Snapshot: Brent crude has broken below the $78 per barrel threshold, printing its lowest level since early March as physical supply anxieties collapse following an interim US-Iran agreement to reopen the Strait of Hormuz. While shipping flows restart in the Persian Gulf, the immediate downside remains structurally cooped up by US Strategic Petroleum Reserve stocks sitting at their lowest levels since 1983 and Cushing inventories tight at 20 million barrels. Today’s pre-market focus pivots to the 08:30 ET US jobless claims and Philly Fed prints for near-term demand cues.

    • Hormuz supply relief: The resumption of Saudi and Iraqi shipping through the Persian Gulf threatens to bring millions of barrels of sidelined output back online, completely overwhelming the supportive backdrop of yesterday’s FOMC-induced slip in US real yields.
    • NY session watch-item: Watch the 08:30 ET US macro double-header; any positive surprise in the Philly Fed index (forecast 9.8) could spark a tactical short-covering bounce given the extremely tight inventory cushions in the US.

    Bias into NY: We hold a tactical bearish bias targeting $76.50, as the physical resolution of the Gulf shipping block easily trumps local inventory constraints and the broader slide in the USD Broad Index to 119.50.

  • NY Session Tactical Brief – Wednesday, 17 June

    Regime: Mixed but leaning risk-on ahead of the FOMC, with the VIX compressed at 16.2 and global equity futures grinding higher as crude’s dramatic plunge below $79 per barrel relieves global energy cost pressures.

    Today’s market themes:

    • Theme 1: **Monetary policy showdown** as the FOMC decision and dot plot collide with a crowded long USD position.
    • Theme 2: **An energy supply shock in reverse** with Brent plunging below $79 on an imminent US-Iran interim agreement.
    • Theme 3: **UK inflation outperformance** as core CPI rises to 2.6%, setting up GBP short-covering against a dovish ECB.

    The setup: We are structurally bearish on the USD heading into the 14:00 ET FOMC decision, positioning for a dovish “hold” that validates a downward shift in dot plots. The DXY at 99.60 is highly vulnerable to a downside break given the extreme 81st percentile net long positioning, while the drop in US 10Y real yields to 2.15% provides a solid runway for gold and risk assets. We are executing this via long Cable ($1.3400) and short USD/CAD (1.3900), leveraging the UK’s sticky core inflation print of 2.6% and the collapse of WTI to under $76 to exploit crowded short positions in both currencies.

    Watch list (native time per event):

    • 08:30 ET: USD Core Retail Sales m/m (forecast 0.6%, prior 0.7%) and Retail Sales m/m (forecast 0.5%, prior 0.5%)
    • 14:00 ET: USD Federal Funds Rate (forecast 3.75%, prior 3.75%) and FOMC Economic Projections/Statement
    • 10:45 NZST: NZD Q1 Gross Domestic Product q/q (forecast -0.1%, prior -0.1%)

    Bias by asset:

    • DXY:
      • Direction: Bearish
      • Domestic (US): Dot plot projections likely to pivot lower from 3.75% baseline.
      • Cross: Oversold European pairs and falling oil prices limit safe-haven demand.
      • Levels: Support 99.10 / Resistance 100.20
    • EUR/USD:
      • Direction: Bullish
      • Domestic (EU): ECB wage tracker shows stable 2026 negotiated wage pressures.
      • Cross: Depressed DXY and narrower US-DE 10Y spread support 1.1600.
      • Levels: Support 1.1550 / Resistance 1.1680
    • GBP/USD (Cable):
      • Direction: Bullish
      • Domestic (UK): Core CPI ticked higher to 2.6%, forcing BoE hawkishness.
      • Cross: Extreme 17th percentile short positioning ripe for aggressive squeeze.
      • Levels: Support 1.3340 / Resistance 1.3480
    • USD/JPY:
      • Direction: Bearish
      • Domestic (JP): Core cash earnings rise keeping MoF on high alert.
      • Cross: Lower US 10Y yield and crowded short unwind cap 161.00.
      • Levels: Support 158.80 / Resistance 160.80
    • USD/CAD (Loonie):
      • Direction: Bearish
      • Domestic (CA): BoC remains data-dependent as core inflation metrics flatten.
      • Cross: Soft DXY offsets the negative oil terms-of-trade impact.
      • Levels: Support 1.3850 / Resistance 1.3960
    • AUD/USD (Aussie):
      • Direction: Bullish
      • Domestic (AU): RBA holds firm at 4.10% due to persistent services inflation.
      • Cross: Broad USD weakness and Chinese active ETF support lift spot.
      • Levels: Support 0.6950 / Resistance 0.7080
    • NZD/USD (Kiwi):
      • Direction: Neutral
      • Domestic (NZ): Q1 GDP data at 10:45 NZST carries significant contraction risk.
      • Cross: Soft US dollar offsets local growth vulnerabilities near 0.5820.
      • Levels: Support 0.5780 / Resistance 0.5890
    • USD/CHF (Swissy):
      • Direction: Neutral
      • Domestic (CH): SNB active easing policy structurally caps Franc appreciation.
      • Cross: Risk-on sentiment shifts safe-haven flows away from CHF.
      • Levels: Support 0.8820 / Resistance 0.8950
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): Bearish EUR/GBP, Bearish EUR/JPY, Bullish GBP/JPY
      • Domestic: UK inflation outperformance clashes with dovish ECB wage tracker signals.
      • Cross: Heavy JPY short positioning drives divergence in European crosses.
      • Levels: EUR/GBP support 0.8380 / GBP/JPY resistance 216.00
    • XAU (Gold):
      • Direction: Bullish
      • Domestic (asset-specific): Real yields falling to 2.15% enhance non-yielding asset appeal.
      • Cross: Weaker DXY and global geopolitical hedges sustain $4,300 base.
      • Levels: Support $4,280 / Resistance $4,350
    • XAG (Silver):
      • Direction: Bullish
      • Domestic (asset-specific): Industrial demand expectations steady despite some soft retail data.
      • Cross: Falling DXY and rising gold prices support silver catch-up.
      • Levels: Support $29.10 / Resistance $31.50
    • WTI / Brent:
      • Direction: Bearish
      • Domestic (asset-specific): US-Iran interim deal unleashes significant stored offshore supply.
      • Cross: Risk-on equities fail to offset physical supply glut dynamics.
      • Levels: Brent support $76.50 / Resistance $80.20
    • Copper:
      • Direction: Bearish
      • Domestic (asset-specific): Soft Chinese industrial demand weighs on heavily crowded longs.
      • Cross: Stronger risk appetite fails to reverse 92nd percentile positioning.
      • Levels: Support $4.40 / Resistance $4.65
    • SPX:
      • Direction: Bullish
      • Domestic (US): Strong corporate profit margins and secular AI tailwinds support index valuations.
      • Cross: VIX falling to 16.2 confirms robust risk-on equity appetite.
      • Levels: Futures support 5,420 / Resistance 5,520
    • NDX:
      • Direction: Bullish
      • Domestic (US): Mega-cap technology earnings and resilient software sector cash flows drive outperformance.
      • Cross: Lower sovereign bond yields fuel valuation expansion in long-duration tech.
      • Levels: Support 19,700 / Resistance 20,050
    • US30 (Dow):
      • Direction: Neutral
      • Domestic (US): Financial sector dividend hikes and industrial manufacturing order rebounds support blue-chips.
      • Cross: Stabilizing sovereign yields offer brief relief above the 52,000 milestone.
      • Levels: Support 51,800 / Resistance 52,300
    • UK100 (FTSE):
      • Direction: Neutral
      • Domestic (UK): High concentration of dividend-paying banking stocks offsets weakness in mining shares.
      • Cross: Global equity rotation provides mild support near 8,250 level.
      • Levels: Support 8,180 / Resistance 8,310
    • DAX:
      • Direction: Bearish
      • Domestic (DE): German automotive sector margin squeeze and weak manufacturing PMI cap upside.
      • Cross: Weaker global growth outlook caps German industrial export gains.
      • Levels: Support 24,650 / Resistance 25,000
    • Nikkei:
      • Direction: Bullish
      • Domestic (JP): Strong corporate governance reforms and positive shareholder returns bolster domestic equities.
      • Cross: Global semiconductor demand boosts Nikkei toward record high 69,902.
      • Levels: Support 69,000 / Resistance 70,500
    • BTC:
      • Direction: Bearish
      • Domestic (asset-specific): Spot ETF net inflows accelerate while CME futures basis spreads contract.
      • Cross: Sharp DXY reversals needed to sustain current $69,450 consolidation.
      • Levels: Support $67,200 / Resistance $70,800

    Positioning watch: Net speculator positioning shows extreme crowds in long DXY (81st percentile), long Bitcoin (98th percentile), and long Copper (92nd percentile), presenting massive unwind risks on any hawkish or growth-disappointing surprises today. Conversely, crowded shorts in the Yen (0th percentile), Sterling (17th percentile), and the S&P 500 (6th percentile) are highly prone to violent short-squeeze rallies if the Fed delivers a dovish signal.

    The pain trade: The ultimate pain trade is a dovish Fed pivot that sparks a vicious short-squeeze in the yen and sterling, rapidly crashing the DXY below 99.00 and decimating crowded USD longs.