Category: Global

  • Bitcoin Wobbles as Saylor Capitulates – Monday, 18 May

    Where we are: BTCUSD is currently trading around $61,500, modestly lower on the session. Overnight range was relatively contained, between $61,000 and $62,000. This level sits slightly below Friday’s New York close, suggesting some early softness ahead of the US open. Key support remains around $60,000, with resistance building near $63,000.

    What’s driving it: The near-term outlook for Bitcoin is clouded by mixed signals. Binance BTCUSDT perp funding is balanced, suggesting no immediate directional pressure from leveraged traders, but the lack of ETF flow data is concerning. The comments from Michael Saylor are a clear sentiment headwind. While broader risk appetite may be marginally supported by a slightly lower VIX, the rise in US real yields is offering an alternative store of value and weighing on non-yielding assets.

    • Saylor changing his stance on selling Bitcoin is an obvious sentiment shift.
    • US 10Y Real Yields are at 2% and trending higher, creating a compelling risk-free alternative to Bitcoin.
    • CFTC data shows net non-commercial Bitcoin positioning at the 79th percentile, suggesting limited room for further long accumulation and increased vulnerability to a squeeze lower.

    NY session focus: The main event risk for Bitcoin will be reaction to upcoming earnings news, with Nvidia and Walmart results potentially driving risk sentiment. Keep an eye on the $60,000 level as a break there could accelerate losses. Initial resistance is at $63,000. If BTC trades heavy into the 08:30 ET open, the $60,000 level will be tested, and a close below would signal further weakness. The pain trade is a sudden resurgence of spot ETF inflows, triggering a short squeeze above $63,000.

  • WTI Crude Faces Supply Jitters Amid Middle East Tension – Monday, 18 May

    Snapshot: WTI crude futures are trading near $105 per barrel, after an earlier spike above $108. Geopolitical tensions in the Middle East are the primary driver, threatening potential supply disruptions.

    • Watch for escalations around the Strait of Hormuz, which could send Oil sharply higher.
    • A temporary waiver of US sanctions on Iranian oil is a key risk to the upside, as indicated by Iranian media reports.

    Bias into NY: Bullish, with a potential run towards $110 if tensions escalate further in the Persian Gulf. However, a resolution to the Iranian sanctions issue could trigger a sharp reversal.

  • North Sea Brent Crude at Risk as Geopolitics Flare – Monday, 18 May

    Snapshot: Brent crude trades near $102, easing from earlier highs, as escalating tensions in the Middle East offset optimism from potential US-Iran talks. Trump’s warnings to Iran and continued blockage of Iranian ports amplify supply concerns, overshadowing reports of a proposed temporary waiver on oil sanctions.

    • Watch for further escalation of tensions in the Persian Gulf after weekend infrastructure attacks.
    • Risk: A surprise breakthrough in US-Iran talks could trigger a sharp pullback.

    Bias into NY: Cautiously bullish on Brent, targeting a retest of $111, driven by heightened geopolitical risks outweighing any short-term reprieve from potential sanction waivers.

  • NY Session Tactical Brief – Friday, 15 May

    Regime: Risk-off, driven by rising oil prices and inflation worries spooking bond markets, pushing US 2Y yields to 3.98%.

    Today’s market themes:

    • Oil supply scare: Strait of Hormuz tensions driving WTI above $104, fueling inflation concerns.
    • Global bond selloff: Rising oil and inflation fears triggering broad-based bond yield increases.
    • USD strength: Dollar continues to rally on Fed hike expectations, nearing best week since March.

    The setup: Oil supply disruptions are the dominant driver, pushing inflation expectations higher and triggering a global bond selloff. The trade is to fade equity rallies, especially in growth names, as real yields rise. Risk is a de-escalation in Middle East tensions, sending oil and yields lower.

    Watch list (native time per event):

    • 08:30 ET US PPI (Prior: +0.2%)
    • 10:00 ET US University of Michigan Consumer Sentiment (Prior: 77.2)
    • 15:00 CET ECB’s Lagarde speaks

    Bias by asset:

    • DXY:
      • Direction: Bullish
      • Domestic (US): Hawkish Fed bets, resilient US data, rising US yields.
      • Cross: Global risk aversion, flight to safety, EUR/USD weakness.
      • Levels: Support 98.50, Resistance 99.50
    • EUR/USD:
      • Direction: Bearish
      • Domestic (EU): Dovish ECB, persistent inflation challenges, peripheral stress.
      • Cross: Strong DXY, widening US-DE 10Y yield spread, risk-off sentiment.
      • Levels: Support 1.1600, Resistance 1.1700
    • GBP/USD (Cable):
      • Direction: Bearish
      • Domestic (UK): BoE hawkishness priced in, potential for dovish repricing, Gilt underperformance.
      • Cross: Strong DXY, widening US-UK 10Y yield spread, risk aversion.
      • Levels: Support 1.3350, Resistance 1.3450
    • USD/JPY:
      • Direction: Neutral
      • Domestic (JP): BoJ remains dovish, intervention threat looms, JGBs constrained.
      • Cross: Rising US 10Y yield, strong DXY, risk aversion.
      • Levels: Support 157.50, Resistance 158.50
    • USD/CAD (Loonie):
      • Direction: Bullish
      • Domestic (CA): BoC’s cautious stance, CPI remains elevated, sensitive to oil price swings.
      • Cross: Strong DXY, widening US-CA 10Y yield spread.
      • Levels: Support 1.3650, Resistance 1.3750
    • AUD/USD (Aussie):
      • Direction: Bearish
      • Domestic (AU): RBA reluctance to tighten aggressively, iron ore price concerns.
      • Cross: Strong DXY, China slowdown fears, risk-off sentiment.
      • Levels: Support 0.7150, Resistance 0.7250
    • NZD/USD (Kiwi):
      • Direction: Bearish
      • Domestic (NZ): RBNZ easing bias firmly entrenched, Dairy prices remain weak.
      • Cross: Strong DXY, risk aversion.
      • Levels: Support 0.5800, Resistance 0.5900
    • USD/CHF (Swissy):
      • Direction: Bullish
      • Domestic (CH): SNB likely to maintain dovish stance, moderate Swiss yields.
      • Cross: Strong DXY, risk aversion driving safe-haven flows out of CHF.
      • Levels: Support 0.7800, Resistance 0.7900
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP: Bearish, EUR/JPY: Bearish, GBP/JPY: Neutral
      • Domestic: BoE remains relatively more hawkish than ECB/BoJ, yield divergence supports GBP.
      • Cross: DXY strength, risk aversion, cross-of-crosses flows impacting correlations.
      • Levels: EUR/GBP: R: 0.8550 S: 0.8500; EUR/JPY: R: 171.00 S: 170.50; GBP/JPY: R: 193.00 S: 192.50
    • XAU (Gold):
      • Direction: Bearish
      • Domestic (asset-specific): Rising real yields, lower breakevens weighing on gold.
      • Cross: Strong DXY, risk-off sentiment limited support.
      • Levels: Support $4,575, Resistance $4,600
    • XAG (Silver):
      • Direction: Bearish
      • Domestic (asset-specific): Weak industrial demand, Gold-Silver ratio trending higher.
      • Cross: Strong DXY, risk aversion exacerbating downside.
      • Levels: Support $4,450, Resistance $4,500
    • WTI / Brent:
      • Direction: Bullish
      • Domestic (asset-specific): Strait of Hormuz tensions, potential supply disruptions, inventories tight.
      • Cross: Weaker DXY providing some offset to risk-off flows.
      • Levels: WTI: S: $102, R: $105; Brent: S: $106, R: $109
    • Copper:
      • Direction: Bearish
      • Domestic (asset-specific): China growth concerns, LME stocks elevated, supply outlook improving.
      • Cross: Strong DXY, risk-off sentiment weighing on industrial metals.
      • Levels: Support $9,800, Resistance $10,000
    • SPX:
      • Direction: Bearish
      • Domestic (US): Rising real yields, concerns about future earnings growth.
      • Cross: Elevated VIX, global risk-off sentiment weighing on equities.
      • Levels: Futures: Support 5220, Resistance 5280
    • NDX:
      • Direction: Bearish
      • Domestic (US): Real yield sensitivity, mega-cap valuations stretched, AI hype fading.
      • Cross: Rates sensitivity, elevated VIX indicating heightened volatility.
      • Levels: Support 19500, Resistance 19700
    • US30 (Dow):
      • Direction: Bearish
      • Domestic (US): Concerns about future earnings growth, pressure on cyclical sectors.
      • Cross: Rising bond yields impacting valuations.
      • Levels: Support 39500, Resistance 40000
    • UK100 (FTSE):
      • Direction: Bearish
      • Domestic (UK): Stronger Sterling weighing, Gilt yields rising, commodity sector under pressure.
      • Cross: Global risk aversion, US tone dragging on sentiment.
      • Levels: Support 8350, Resistance 8400
    • DAX:
      • Direction: Bearish
      • Domestic (DE): Rising Bund yields, weak IFO/ZEW survey data, EU growth concerns.
      • Cross: US tech weakness, DXY strength, risk-off sentiment.
      • Levels: Support 24100, Resistance 24300
    • Nikkei:
      • Direction: Bearish
      • Domestic (JP): Stronger JPY weighing, BoJ under pressure to act, JGB yield curve flattening.
      • Cross: US tech weakness, risk aversion.
      • Levels: Support 38500, Resistance 39000
    • BTC:
      • Direction: Bearish
      • Domestic (asset-specific): Elevated funding rates, ETF flows slowing, on-chain metrics mixed.
      • Cross: Strong DXY, risk aversion, Nasdaq correlation weighing on sentiment.
      • Levels: Support $61,000, Resistance $63,000

    Positioning watch: AUD and Bitcoin are crowded longs (>95th percentile) vulnerable to disappointment if risk aversion intensifies or data disappoints, creating squeeze risk. JPY is a crowded short (<15th percentile) and could rally hard if the BoJ surprises or intervention occurs.

    The pain trade: A de-escalation in Middle East tensions, leading to a sharp drop in oil prices and a rally in risk assets, would hurt crowded short positions in bonds and crowded long positions in the dollar.

  • Gold Plunges on Rate-Hike Bets; More Pain Ahead – Friday, 15 May

    Where we are: Gold is currently trading around $4,585, testing overnight lows, after a significant drop overnight saw bullion shed 2%. The slide positions gold to fall roughly 3% for the week, and breaks through the $4,600 handle, a key support level we have been watching closely. The move wipes out gains from earlier in the week, leaving it below the prior NY close of $4,650.

    What’s driving it: The primary driver remains the recalibration of Fed rate-cut expectations, fueled by stubbornly high US inflation. Rising US real yields and a stronger dollar are sapping gold’s appeal as a safe haven and inflation hedge, particularly after US wholesale and consumer prices both surprised to the upside. Adding to the pressure, news of further tightening of gold import regulations by India is weighing on physical demand, reflected in soaring discounts in the Asian market. While Fed officials Barr and Bowman both spoke yesterday, neither offered explicit guidance on the path forward for rates.

    • US 2Y yield sits at 3.98%, down 2bp d/d but still elevated, keeping pressure on non-yielding assets like gold.
    • India gold discounts soar to record high, reflecting impact of import duty hike and diminished demand.
    • Speculator positioning remains modestly long (+163,303 contracts) but at a relatively low percentile (21st), suggesting limited short-squeeze potential, but more room to add to shorts.

    NY session focus: Watch the 08:30 ET US data releases closely for any further surprises on the inflation front; stronger-than-expected prints will solidify the rate-hike narrative and could send gold spiraling towards $4,550. Conversely, a downside surprise could trigger a relief rally, pushing gold back towards $4,620. The Goldman Sachs call for energy stock strength could also translate into commodity complex strength. The trade that’s working right now is short XAU/USD, while the at-risk trade is holding long positions. The pain trade would be a dovish pivot from the Fed fueled by a sharp deceleration in inflation, catching the market off guard and triggering a rapid short squeeze.

  • Bitcoin Consolidates After Overnight Dip; Squeeze Risks Remain – Friday, 15 May

    Where we are: BTCUSD is currently trading around $62,050, holding steady after an overnight dip to $61,500. The price action remains choppy, oscillating within a $1,500 range since the New York close yesterday. Immediate resistance lies at $62,500, a break above which could open the door to a retest of $63,000. Support is found at $61,000, a breach of which could signal a deeper correction.

    What’s driving it: Bitcoin’s price action is currently muted with slightly negative perpetual funding rates on Binance (-4.17% annualized). Spot ETF net flows are the primary focus for direction, though those haven’t wired yet. We’re also still awaiting the on-chain data points (active addresses, exchange netflows). The crowded long positioning evident in the CFTC data (83rd percentile) leaves Bitcoin vulnerable to a squeeze if fresh inflows fail to materialize or sentiment sours. A slight softening in US 2Y yields (-2bp yesterday) offers marginal support, but the domestic crypto narrative dominates for now.

    • Binance BTCUSDT perpetual funding: -0.0038% per 8h (annualised ≈ -4.17%), indicating a slightly bearish bias in the derivatives market.
    • CFTC data shows net non-commercial positions at +1,441 contracts, down -951 w/w but still in the 83rd percentile, highlighting squeeze risk.
    • Christopher Harborne, a crypto billionaire, entered the UK rich list at No 6, highlighting the growing influence of crypto wealth.

    NY session focus: Traders will be closely monitoring the release of US data at 08:30 ET for any impact on broader risk sentiment and USD. Key levels to watch are $61,000 and $62,500, with a break of either potentially triggering a significant move. The current consolidation offers a potential entry point for longs if positive ETF flow data emerges. The pain trade for Bitcoin remains a sharp correction fueled by weak ETF inflows and a squeeze of overleveraged longs.

  • WTI Crude Rally Fueled by Supply Concerns – Friday, 15 May

    Snapshot: WTI crude is pushing above $104 this morning, up over 3% and on track for a 9% weekly gain, as supply anxieties related to the Strait of Hormuz crisis dominate the narrative. The limited tanker traffic out of the Persian Gulf since the conflict began is the primary driver.

    • Watch for a break above $105, which could trigger further upside towards the recent highs.
    • President Trump’s mixed messaging adds uncertainty; monitor for further comments.

    Bias into NY: We favour further upside in US Oil towards $106, driven by the increasingly constrained supply picture, even as the US 2Y yield sits at 3.98%. Any easing of tensions in the region would present a significant downside risk.

  • Brent Crude Bullish on Strait Closure – Friday, 15 May

    Snapshot: Brent is bid at $108, up on the session, driven by ongoing supply concerns as the Strait of Hormuz remains effectively closed. Geopolitical risk is the dominant factor, outweighing broader macro concerns.

    • Watch for further escalations in the Middle East, as any new developments will likely exacerbate supply anxieties and drive prices higher.
    • US 2Y yields remain near 4.00%; any sustained rise could provide headwinds to commodity prices later in the NY session.

    Bias into NY: Bullish on Brent while the Strait remains a chokepoint. A break above $110 would confirm the move, targeting $112 next.

  • NY Session Tactical Brief – Thursday, 14 May

    Regime: Mixed; VIX at 17.99 with US yields rising slightly and the DXY consolidating gains around 118.15 indicates a tentative risk-neutral stance.

    Today’s market themes:

    • Trump-Xi meeting impact: assessing US-China trade and oil relationship, especially regarding Iran sanctions.
    • US Retail Sales: markets are awaiting direction with Retail Sales release.
    • Crowded trades: the market is set up for a potential short squeeze, with several currencies and asset classes showing heavily skewed positioning.

    The setup: Traders are positioned for USD strength and are short GBP, JPY, and NZD. US retail sales data will be key to either confirming this bias or triggering a squeeze. Watch US 10Y yields; sustained move above 4.5% could exacerbate USD strength.

    Watch list (native time per event):

    • 07:00 London GBP: GDP m/m (forecast -0.1%, prior 0.5%)
    • 08:30 ET USD: Core Retail Sales m/m (forecast 0.7%, prior 1.9%)
    • 08:30 ET USD: Retail Sales m/m (forecast 0.5%, prior 1.7%)

    Bias by asset:

    • DXY:
      • Direction: Neutral
      • Domestic (US): Data dependent on Retail Sales, Fed policy on inflation.
      • Cross: Risk sentiment / global growth outlook drive flows
      • Levels: Support 117.80 / Resistance 118.30
    • EUR/USD:
      • Direction: Neutral
      • Domestic (EU): ECB rhetoric, EU data release sensitive to global narrative.
      • Cross: DXY strength, US-DE 10Y spread.
      • Levels: Support 1.1680 / Resistance 1.1740
    • GBP/USD (Cable):
      • Direction: Bearish
      • Domestic (UK): GDP print spurring rate cut bets, Gilt yield declines.
      • Cross: DXY strength / US-UK 10Y widening
      • Levels: Support 1.2450 / Resistance 1.2520
    • USD/JPY:
      • Direction: Bullish
      • Domestic (JP): BoJ’s hawkish tone not enough to combat carry demand.
      • Cross: US 10Y strength / risk-on / intervention watch
      • Levels: Support 157.50 / Resistance 158.00
    • USD/CAD (Loonie):
      • Direction: Bullish
      • Domestic (CA): BoC policy path, oil price fluctuations are the driver.
      • Cross: DXY strength / US-CA 10Y differential.
      • Levels: Support 1.3680 / Resistance 1.3740
    • AUD/USD (Aussie):
      • Direction: Neutral
      • Domestic (AU): RBA policy path / key commodity prices affecting sentiment.
      • Cross: DXY correlation, China growth, US-AU 10Y
      • Levels: Support 0.7170 / Resistance 0.7230
    • NZD/USD (Kiwi):
      • Direction: Bearish
      • Domestic (NZ): RBNZ dovish stance is the driver.
      • Cross: DXY direction, Risk / US-NZ 10Y
      • Levels: Support 0.5900 / Resistance 0.5950
    • USD/CHF (Swissy):
      • Direction: Bullish
      • Domestic (CH): SNB’s easing policy stance.
      • Cross: DXY strength, safe-haven demand fluctuation.
      • Levels: Support 0.7800 / Resistance 0.7850
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP Neutral, EUR/JPY Neutral, GBP/JPY Bearish
      • Domestic: Rate spreads/relative central bank stance
      • Cross: Risk, cross-of-crosses
      • Levels: Watch relative breaks; range trades
    • XAU (Gold):
      • Direction: Neutral
      • Domestic (asset-specific): Real yields are the driver.
      • Cross: DXY influence, risk sentiment.
      • Levels: Support 4670 / Resistance 4700
    • XAG (Silver):
      • Direction: Neutral
      • Domestic (asset-specific): Gold-Silver ratio influences direction.
      • Cross: DXY influence, risk correlation.
      • Levels: Support 30.40 / Resistance 30.70
    • WTI / Brent:
      • Direction: Neutral
      • Domestic (asset-specific): Supply/demand influences, WTI-Brent Spread affects trend.
      • Cross: DXY influence, risk sentiment.
      • Levels: Support 100.50 / Resistance 102.50
    • Copper:
      • Direction: Neutral
      • Domestic (asset-specific): China growth outlook is the main driver.
      • Cross: Global growth sentiment.
      • Levels: Support 5.00 / Resistance 5.10
    • SPX:
      • Direction: Bullish
      • Domestic (US): Earnings, Fed policy influences market direction.
      • Cross: Risk regime, Global Tone, yields correlation.
      • Levels: Futures level Support 5330 / Resistance 5350.
    • NDX:
      • Direction: Bullish
      • Domestic (US): Mega-cap earnings are a major factor.
      • Cross: Rates / Volatility (VIX).
      • Levels: Support 18,750 / Resistance 18,850
    • US30 (Dow):
      • Direction: Bullish
      • Domestic (US): Industrial / Financial earnings support this.
      • Cross: Bond yield / overall market tone affecting direction.
      • Levels: Support 50,000 / Resistance 50,250
    • UK100 (FTSE):
      • Direction: Neutral
      • Domestic (UK): Domestic-centric influences such as Sterling performance.
      • Cross: Market Sentiment / US tone impacting direction.
      • Levels: Support 8,400 / Resistance 8,450
    • DAX:
      • Direction: Bullish
      • Domestic (DE): Domestic sentiment and yields.
      • Cross: US tech impacts, DXY correlation.
      • Levels: Support 24,350 / Resistance 24,450
    • Nikkei:
      • Direction: Neutral
      • Domestic (JP): JPY impacts, BOJ policy stance.
      • Cross: US tech influence, global risk factors.
      • Levels: Support 38,800 / Resistance 39,200
    • BTC:
      • Direction: Neutral
      • Domestic (asset-specific): ETF flow / on-chain metrics drive direction.
      • Cross: Risk sentiment & Nasdaq performance impact.
      • Levels: Support 61,500 / Resistance 62,500

    Positioning watch: AUD/USD, Copper, and Bitcoin are crowded longs, creating squeeze risk if data disappoints; GBP, JPY, and NZD are crowded shorts, vulnerable to upside surprises. CFTC shows dollar index positioning very stretched.

    The pain trade: A dovish tilt from the Fed combined with strong UK data and a resolution of Iran tensions would trigger a massive short squeeze in GBP, JPY, NZD, Gold, and rates.

  • Gold Under Pressure as Real Yields Climb – Thursday, 14 May

    Where we are: Spot gold trades near $4,690, consolidating after a slight pullback in European hours. Overnight range has been contained, and the price is just below yesterday’s New York close. Bullion remains below the key $4,700 resistance level, struggling to gain upward traction.

    What’s driving it: Rising US real yields continue to exert downward pressure on gold. The 10-year TIPS yield is up 4bp to 1.99%, making the non-yielding precious metal less attractive. While breakeven inflation remains steady, the widening gap between nominal and real yields favors holding bonds over bullion. The lack of progress on trade between the US and China and concerns around the Iran conflict, traditionally supportive for gold, are being overshadowed by the stronger-for-longer narrative in US monetary policy.

    • US 10Y Real Yield rising 4bp to 1.99% puts further pressure on gold price.
    • Gold discounts in India are breaching $200/ounce as profit-taking accelerates.
    • Speculator positioning in gold remains modestly long, but not at an extreme, minimizing the risk of a short squeeze.

    NY session focus: All eyes are on the 08:30 ET release of US Retail Sales and Unemployment Claims. Strong prints could reinforce the hawkish Fed outlook and trigger another leg higher in real yields, pushing gold lower. Key levels to watch are $4,675 as initial support and $4,700 as immediate resistance. The trade that’s working is shorting gold on rallies, while the trade at risk is expecting a significant bounce without a dovish surprise from the data. The pain trade would be a weaker-than-expected Retail Sales number, prompting a real-yield correction and a short-covering rally in gold.

  • Bitcoin Drifts Lower as Macro Focus Shifts – Thursday, 14 May

    Where we are: Bitcoin is currently trading around $62,050, slightly below the overnight range of $61,800 to $62,500. This is down from yesterday’s New York close around $62,300. Key support remains at $60,000, while resistance is forming around $63,000. Intraday momentum is weak, suggesting consolidation ahead of key data releases.

    What’s driving it: Bitcoin is lacking a distinct asset-specific driver this morning as we await spot ETF flow data and on-chain activity metrics. Binance BTCUSDT perp funding is balanced, around 0.70% annualised, offering no directional signal. Meanwhile, broader risk sentiment, influenced by rising US real yields (+4.0bp d/d to 1.99%) and a steady dollar (USD Broad Index at 118.0392), is weighing slightly on BTC. Traders are cautiously positioned ahead of the 08:30 ET retail sales print which will set the tone for the remainder of the session.

    • US 2Y Yield at 4% (+5.0bp d/d) indicating short-end rates pressure.
    • CFTC data shows net non-commercial Bitcoin positioning at +1,441 contracts, a crowded long position (83rd percentile) increasing squeeze risk on any negative surprises.
    • WTI Crude at $101.56/bbl, up 2.72% overnight, suggesting continued inflationary pressures which could influence Fed policy and risk appetite.

    NY session focus: All eyes are on the 08:30 ET US Retail Sales and Unemployment Claims releases, with stronger-than-expected data likely triggering a further rise in US yields and potentially pressuring Bitcoin. Key levels to watch are $60,000 (support) and $63,000 (resistance). The short BTC/long ETH ratio trade is looking increasingly attractive given ETH’s relative outperformance. The pain trade for Bitcoin would be a surprisingly weak retail sales print triggering a sharp risk-on move, squeezing shorts and sending BTC back towards $65,000.

  • WTI Crude Faces Headwinds Despite Mideast Tensions – Thursday, 14 May

    Snapshot: WTI Crude futures are trading sideways after yesterday’s 2.7% rally, holding around $101.50, as the market awaits the 08:30 ET US Retail Sales data. Focus remains on the potential impact of demand as the market balances economic growth against lingering supply worries. Yesterday’s news flow saw China expressing willingness to buy more US crude.

    • Watch for a break above $102, which would signal further upside in the short term, though moderately long positioning (69th percentile) creates squeeze risk.
    • The 08:30 ET US Retail Sales data poses a downside risk; a weaker-than-expected print could weigh on prices.

    Bias into NY: Sideways to slightly lower, with limited upside potential, given the data risk at 08:30 ET, and the rising real yields which act as a headwind. Support sits around $100.50.

  • North Sea Crude Faces Demand Concerns – Thursday, 14 May

    Snapshot: Brent crude is holding around $105/bbl ahead of key US retail sales data at 08:30 ET. OPEC cutting its demand growth estimates for 2026 weighs on sentiment while IEA highlights ongoing undersupply.

    • Watch 08:30 ET Retail Sales; a stronger print reignites inflation concerns and boosts the dollar, pressuring crude.
    • Geopolitical tensions remain a wild card. Developments around the Strait of Hormuz warrant close monitoring.

    Bias into NY: Sideways to slightly bearish, with OPEC’s demand concerns capping upside. A weaker-than-expected retail sales number might provide a temporary boost, but broader headwinds remain.

  • NY Session Tactical Brief – Wednesday, 13 May

    Regime: Mixed — VIX holding near 18.40 amid rising US real yields, capping risk appetite.

    Today’s market themes:

    • Real-rate repricing: Fed nomination vote and PPI data set to dictate the pace of the climb, pressuring gold and growth stocks.
    • Iran War Impact: Ongoing supply disruptions and inventory depletion boosting oil prices, triggering inventory concerns.
    • Crowded FX positions: Extreme positioning in AUD, NZD, JPY and GBP presents squeeze risks on data surprises.

    The setup: Rising real yields are the dominant force. Focus is on US PPI and the Fed nomination vote today to further define the Fed’s path. Watch for a continued bid in US yields to pressure equities and gold, with DXY bid into the European open. Key is whether 10Y TIPS break 2.00%.

    Watch list (native time per event):

    • 08:30 ET USD: Core PPI m/m (forecast 0.3%, prior 0.1%)
    • 08:30 ET USD: PPI m/m (forecast 0.5%, prior 0.5%)
    • 14:30 ET USD: Fed Chair Nomination Vote (forecast Pass, prior —)

    Bias by asset:

    • DXY:
      • Direction: Bullish
      • Domestic (US): Strong US data supports hawkish Fed, boosting USD.
      • Cross: Risk-off flows and rising US yields underpin the dollar.
      • Levels: Support 117.80, Resistance 118.50.
    • EUR/USD:
      • Direction: Bearish
      • Domestic (EU): Eurozone growth concerns and relatively dovish ECB weigh on EUR.
      • Cross: Stronger USD and widening US-DE yield spread pressure EUR/USD.
      • Levels: Support 1.0760, Resistance 1.0820.
    • GBP/USD (Cable):
      • Direction: Bearish
      • Domestic (UK): BoE easing expectations, pressured by persistent inflation, weigh on the Pound.
      • Cross: Stronger USD and widening US-UK yield spread pressure Cable.
      • Levels: Support 1.2460, Resistance 1.2520.
    • USD/JPY:
      • Direction: Bullish
      • Domestic (JP): BoJ still dovish relative to Fed; intervention risk lingers.
      • Cross: Higher US yields drive USD/JPY higher despite intervention risks.
      • Levels: Support 157.75, Resistance 158.50.
    • USD/CAD (Loonie):
      • Direction: Bullish
      • Domestic (CA): WTI price volatility offsets CAD strength from BoC rate cuts.
      • Cross: USD strength and widening US-CA yield spreads favor upside.
      • Levels: Support 1.3650, Resistance 1.3700.
    • AUD/USD (Aussie):
      • Direction: Bearish
      • Domestic (AU): RBA easing expectations and weak CPI growth weigh on AUD.
      • Cross: Stronger USD and risk-off sentiment hurt the Aussie.
      • Levels: Support 0.7175, Resistance 0.7225.
    • NZD/USD (Kiwi):
      • Direction: Bearish
      • Domestic (NZ): RBNZ dovishness and concerns about domestic demand hurt the Kiwi.
      • Cross: Stronger USD and risk-off sentiment weigh on NZD/USD.
      • Levels: Support 0.5900, Resistance 0.5950.
    • USD/CHF (Swissy):
      • Direction: Bullish
      • Domestic (CH): SNB intervention unlikely; Swiss yields remain low.
      • Cross: Risk-off flows less supportive with strong USD driving gains.
      • Levels: Support 0.7800, Resistance 0.7850.
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP: Neutral, EUR/JPY: Bullish, GBP/JPY: Bullish
      • Domestic: Relative CB stance — BoE slightly more hawkish than ECB. BoJ lags both.
      • Cross: DXY strength benefiting JPY crosses, risk tone dictates flows.
      • Levels: EUR/GBP: 0.8510-0.8560, EUR/JPY: 169.00-170.00, GBP/JPY: 192.80-193.80
    • XAU (Gold):
      • Direction: Bearish
      • Domestic (asset-specific): Rising real yields are a significant headwind.
      • Cross: Stronger USD and risk-off environment further pressure Gold.
      • Levels: Support $4,675, Resistance $4,725.
    • XAG (Silver):
      • Direction: Bearish
      • Domestic (asset-specific): Industrial demand is soft, Gold/Silver ratio rising.
      • Cross: Stronger USD and risk-off environment weigh on Silver.
      • Levels: Support $29.00, Resistance $29.50.
    • WTI / Brent:
      • Direction: Bullish
      • Domestic (asset-specific): IEA reports record draw in global oil inventories due to Iran War.
      • Cross: Risk sentiment generally supportive, but DXY strength a cap.
      • Levels: WTI Support $101.00, Resistance $103.00.
    • Copper:
      • Direction: Bearish
      • Domestic (asset-specific): China growth concerns resurface, LME stocks remain high.
      • Cross: Global growth worries and DXY strength pressure Copper.
      • Levels: Support $5.00, Resistance $5.10.
    • SPX:
      • Direction: Bearish
      • Domestic (US): Higher yields weigh on valuations, focus on earnings.
      • Cross: VIX spikes indicate potential for further downside risk.
      • Levels: Futures support 5200, resistance 5250 (cash: key levels to use).
    • NDX:
      • Direction: Bearish
      • Domestic (US): Mega-cap tech vulnerable to higher real yields.
      • Cross: High rate sensitivity amplifies downside in risk-off environment.
      • Levels: Support 19,500, Resistance 19,700.
    • US30 (Dow):
      • Direction: Bearish
      • Domestic (US): Cyclical sector earnings sensitive to rising yields.
      • Cross: Bond yield reaction to data key driver of Dow performance.
      • Levels: Support 39,000, Resistance 39,500.
    • UK100 (FTSE):
      • Direction: Neutral
      • Domestic (UK): Sterling strength offsetting positive global risk sentiment.
      • Cross: Global risk appetite supports, but US tone a key determinant.
      • Levels: Support 8350, Resistance 8400.
    • DAX:
      • Direction: Neutral
      • Domestic (DE): Bund yields stable; focus on EU sentiment indicators.
      • Cross: US tech performance influences DAX, DXY strength is a cap.
      • Levels: Support 24,000, Resistance 24,100.
    • Nikkei:
      • Direction: Neutral
      • Domestic (JP): JPY weakness supports, BoJ policy stance is key.
      • Cross: US tech performance and risk-on sentiment drive Nikkei.
      • Levels: Support 63,000, Resistance 63,500.
    • BTC:
      • Direction: Bearish
      • Domestic (asset-specific): Funding rates remain elevated, ETF flows slowing.
      • Cross: DXY strength and risk-off sentiment hurt Bitcoin. Nasdaq correlation matters.
      • Levels: Support $62,000, Resistance $63,000.

    Positioning watch: CFTC data shows crowded longs in AUD, Copper, and Bitcoin (above 80th percentile), vulnerable to a squeeze on any downside surprises. Crowded shorts in GBP, JPY and NZD present an upside risk.

    The pain trade: A surprise dovish tilt from the Fed on the nomination vote or a much weaker-than-expected PPI print would trigger a short squeeze in crowded USD shorts and boost risk assets, especially the crowded AUD/USD longs.

  • Gold Under Pressure as Real Yields Climb – Wednesday, 13 May

    Where we are: Gold is trading near $4,700 an ounce as the New York session prepares to open, pressured by rising real yields. The precious metal failed to hold overnight gains following reports of increased Indian import tariffs. The move lower has broken intraday support at $4,710 and is now testing the $4,690 level. Prior NY close was near $4,720.

    What’s driving it: Rising US real yields are the primary headwind for gold. The 10Y TIPS yield is currently at 1.95%, having risen 2bp since Monday. The unchanged 10Y breakeven inflation rate at 2.47% further underscores the pressure from real rates, as inflation expectations are not keeping pace. News that India has more than doubled tariffs on gold imports will curb physical demand and support the rupee.

    • Reuters reported overnight that gold fell as hot US inflation data diminish rate cut bets.
    • India hikes bullion import duties as the world’s second-largest gold market faces a declining rupee — CNBC.
    • Speculative positioning remains modestly long, with net non-commercial positions at +163,303 contracts, at the 21st percentile.

    NY session focus: All eyes will be on the 08:30 ET release of US PPI data. A higher-than-forecast print (0.5% headline, 0.3% core) will likely further boost real yields and exacerbate the downward pressure on gold. Focus will shift to the Fed Chair Nomination Vote at 14:30 ET. Key levels to watch are $4,680 (support) and $4,720 (resistance). The short gold/long real yields trade remains the favoured play. The pain trade would be a surprise dovish turn from the Fed causing real yields to plummet.