Category: US

  • S&P 500 Set to Consolidate Gains – Friday, 1 May

    Where we are: S&P 500 futures are trading flat around 5,300, holding onto gains from the recent rally. The overnight range has been relatively tight, contained within 5,290 and 5,310. This level is slightly above yesterday’s NY close, suggesting a modest positive bias heading into the open. Key levels to watch remain the all-time high near 5,330 and support around 5,275.

    What’s driving it: The US picture remains focused on the interplay between growth and inflation. While earnings have largely supported the market, rising real yields, currently at 1.96%, present a headwind for risk assets like the S&P 500, as they increase the opportunity cost of holding equities versus safer fixed income. Geopolitical jitters, specifically the ongoing conflict involving Iran, add another layer of complexity; however, markets appear to be largely pricing in the near-term disruption to oil shipments, with WTI crude trading just below $100/bbl.

    • The 2s10s yield curve is at 0.52%, suggesting that markets are not overly concerned about a recession despite the rise in yields.
    • Speculator positioning in S&P 500 futures is modestly short, with net non-commercial contracts at -109,957, but this is only at the 69th percentile, so squeeze risk is moderate rather than acute.
    • Apple’s strong earnings report, highlighted by a 3% premarket jump, is supporting tech sentiment and the broader market.

    NY session focus: The key event for today’s session is the ISM Manufacturing PMI and Prices data at 10:00 ET. A stronger-than-expected print on the prices component (forecast at 80.0) could reignite inflation concerns and trigger a further rise in yields, potentially weighing on the S&P 500. Conversely, a weaker reading could provide some relief and allow the rally to continue. Focus will also be on how the market digests the analyst calls on Nvidia, Apple, and other large-cap stocks. The trade that’s working remains long tech, particularly Apple, while the trade at risk is short energy, given the ongoing geopolitical risks. The pain trade would be a significant upside surprise in the ISM prices component, forcing a rapid repricing of Fed rate expectations.

  • Nasdaq 100 Vulnerable as Real Yields Grind Higher – Friday, 1 May

    Where we are: The Nasdaq 100 is trading near unchanged at 18,050 in pre-market trading. The overnight range has been tight, confined between 18,000 and 18,100. This level is just below yesterday’s New York close, suggesting a slightly cautious tone ahead of key data releases.

    What’s driving it: The primary driver is the continued rise in US real yields, with the 10-year TIPS yield climbing another 4bp to 1.96%. This exerts downward pressure on growth stocks, particularly in the tech sector. While breakeven inflation remains stable at 2.46%, the persistent rise in real rates suggests the market is pricing in a hawkish Fed stance or concerns about sustained economic growth. The fact that AI investment carried US GDP in Q1 offsetting slowing private consumption is also a consideration. The broad dollar index remains firm at 118.7294, further weighing on risk assets.

    • The 10Y Real Yield at 1.96% is a major headwind for tech valuations, especially given elevated multiples.
    • CFTC data shows net non-commercial positioning in Nasdaq 100 futures is modestly long but at the 4th percentile, suggesting limited further upside and potential for a squeeze to the downside.
    • Alphabet nearing a $5 trillion valuation and the possibility of overtaking Nvidia underscores the concentration risk within the Mag 7.

    NY session focus: The key event for today will be the release of ISM Manufacturing PMI and ISM Manufacturing Prices at 10:00 ET. A strong reading in either could exacerbate the real yield pressure and trigger a sell-off in the Nasdaq 100. Key levels to watch are 18,000 as immediate support and 17,800 as the next major level. Resistance sits at 18,150. The working trade has been shorting rallies into resistance. The trade at risk is chasing upside breakouts given the macro headwinds. The pain trade would be a dovish surprise triggering a risk-on rally that squeezes shorts.

  • Dow Jones Set to Consolidate Gains – Friday, 1 May

    Where we are: Dow futures are trading slightly higher at 38,850, holding onto gains from the previous session. The index is consolidating within a tight range overnight, roughly between 38,780 and 38,880, and remains above the prior NY close. Technically, the index is testing resistance at the 38,900 level.

    What’s driving it: The Dow’s resilience is underpinned by robust earnings reports, particularly from Apple, which beat expectations despite Tim Cook’s announced departure. However, the rise in US real yields, now at 1.96%, continues to present a headwind for risk assets, potentially limiting further upside. While solid corporate earnings and AI investment have buoyed US GDP, markets are closely watching for signs of slowing private consumption, suggesting a mixed backdrop for the Dow.

    • Apple’s post-earnings rally (+3% premarket) is providing a tailwind for the index, especially given its large weighting.
    • Rising US 10Y real yields (+4bp d/d) are tightening financial conditions and weighing on valuations.
    • Speculator positioning in Dow futures remains modestly short (-1,731 contracts), suggesting limited scope for a major short squeeze despite the recent rally.

    NY session focus: All eyes will be on the 10:00 ET release of the ISM Manufacturing PMI and ISM Manufacturing Prices. A beat on both could further support the Dow, while a miss may trigger a pullback. Key levels to watch are 38,900 as resistance and 38,700 as support. The trade that’s working is buying dips on positive earnings news. The trade at risk is chasing the rally on limited fresh catalysts. The pain trade would be a sharp rally in US yields and a simultaneous dovish surprise in the ISM data.

  • NY Session Tactical Brief – Thursday, 30 April

    Regime: Risk-on, fueled by dovish central bank pivots and a weaker DXY (98.33), as global yields decline.

    Today’s market themes:

    • Dovish repricing of global central bank outlooks, with focus on BoE and ECB.
    • USD weakness amplified by potential intervention risks in USD/JPY, testing multi-decade highs.
    • Geopolitical tensions (US-Iran) continue to underpin commodities volatility.

    The setup: Markets are positioned for lower rates globally, but BoE and ECB decisions are crucial. The trade is to fade USD strength on any hawkish surprises. Risks include stronger US data or escalation of geopolitical tensions. US 10Y at 4.389% and DXY at 98.33 are key levels.

    Watch list (native time per event):

    • 08:30 ET CAD: GDP m/m (forecast 0.2%, prior 0.1%)
    • 12:00 BST GBP: BoE Monetary Policy Report
    • 14:15 CET EUR: Main Refinancing Rate (forecast 2.15%, prior 2.15%)

    Bias by asset:

    • DXY:
      • Direction: Down
      • Domestic (US): Fed on hold, focusing on inflation; data-dependent bias.
      • Cross: Dovish global CB pivots weighing; intervention watch impacting.
      • Levels: Support at 98.00, resistance at 98.75.
    • EUR/USD:
      • Direction: Up
      • Domestic (EU): ECB likely dovish, but watchful of inflation and fragmentation.
      • Cross: Weaker DXY, supporting; focus on US-DE 10Y spread widening.
      • Levels: Support at 1.1650, resistance at 1.1720.
    • GBP/USD (Cable):
      • Direction: Neutral
      • Domestic (UK): BoE holds steady; focus on inflation persistence.
      • Cross: DXY softness helps; US-UK 10Y spread still favoring USD.
      • Levels: Support at 1.3450, resistance at 1.3550.
    • USD/JPY:
      • Direction: Down
      • Domestic (JP): Intervention risk elevated; BoJ still dovish.
      • Cross: US 10Y dropping; risk aversion flows boosting JPY.
      • Levels: Support at 155.50, resistance at 157.50.
    • USD/CAD (Loonie):
      • Direction: Down
      • Domestic (CA): GDP key; BoC cautious; commodity support.
      • Cross: Weaker DXY; US-CA 10Y spread compression.
      • Levels: Support at 1.3645, resistance at 1.3700.
    • AUD/USD (Aussie):
      • Direction: Up
      • Domestic (AU): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY weakness; Copper prices boosting; China growth hopes.
      • Levels: Support at 0.7100, resistance at 0.7170.
    • NZD/USD (Kiwi):
      • Direction: Up
      • Domestic (NZ): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY weakness; risk-on sentiment supporting; squeezed shorts.
      • Levels: Support at 0.5820, resistance at 0.5880.
    • USD/CHF (Swissy):
      • Direction: Down
      • Domestic (CH): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY drop; safe-haven demand waning; yields declining.
      • Levels: Support at 0.7830, resistance at 0.7900.
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP: Neutral; EUR/JPY: Down; GBP/JPY: Down.
      • Domestic: See individual currency biases for CB divergence.
      • Cross: DXY influence; risk appetite dictating flows.
      • Levels: Watch key support/resistance on the individual crosses.
    • XAU (Gold):
      • Direction: Up
      • Domestic (asset-specific): Real yields still supportive; geopolitical bids strong.
      • Cross: Weaker DXY; safe-haven demand persisting.
      • Levels: Support at 4550, resistance at 4660.
    • XAG (Silver):
      • Direction: Up
      • Domestic (asset-specific): Industrial demand increasing; Gold-Silver ratio still elevated.
      • Cross: DXY weakness; risk-on tone helping.
      • Levels: Support at 7150, resistance at 7450.
    • WTI / Brent:
      • Direction: Neutral
      • Domestic (asset-specific): Supply concerns remain; EIA inventories in focus.
      • Cross: DXY influence; geopolitical risk premium embedded.
      • Levels: WTI support at 103.00, resistance at 106.00.
    • Copper:
      • Direction: Up
      • Domestic (asset-specific): China growth hopes remain; LME stocks watched.
      • Cross: Global growth proxy; DXY weakness aiding.
      • Levels: Support at 590, resistance at 605.
    • SPX:
      • Direction: Up
      • Domestic (US): Earnings positive; Fed on hold supporting.
      • Cross: VIX subdued; global risk appetite constructive.
      • Levels: Futures support at 7130, resistance at 7220.
    • NDX:
      • Direction: Up
      • Domestic (US): Mega-cap earnings driving gains; real yields remain low.
      • Cross: Rates sensitivity still relevant; VIX relatively calm.
      • Levels: Support at 27200, resistance at 27700.
    • US30 (Dow):
      • Direction: Up
      • Domestic (US): Cyclical earnings holding up; financial sector performing.
      • Cross: Bond-yield reaction contained; risk-on flowing through.
      • Levels: Support at 48700, resistance at 49500.
    • UK100 (FTSE):
      • Direction: Up
      • Domestic (UK): No fresh domestic catalyst — sensitive to US response.
      • Cross: Global risk appetite boosting; US tone constructive.
      • Levels: Support at 22100, resistance at 22500.
    • DAX:
      • Direction: Up
      • Domestic (DE): No fresh domestic catalyst — sensitive to US response.
      • Cross: US tech strength helpful; DXY weighing less; risk regime strong.
      • Levels: Support at 23700, resistance at 24200.
    • Nikkei:
      • Direction: Neutral
      • Domestic (JP): No fresh domestic catalyst — sensitive to US response.
      • Cross: US tech providing support; risk appetite generally good.
      • Levels: Support at 58900, resistance at 59500.
    • BTC:
      • Direction: Neutral
      • Domestic (asset-specific): ETF flows stable; funding rates watched.
      • Cross: DXY weakness supporting; Nasdaq correlation remains intact.
      • Levels: Support at 75000, resistance at 77000.

    Positioning watch: JPY remains the most crowded short (0%ile), making it vulnerable to a squeeze on any hawkish BoJ surprise or intervention. Copper, AUD and Bitcoin also hold crowded long positions (>80th percentile), making them vulnerable to sharp selloffs on weaker China data, stronger DXY or a risk-off event.

    The pain trade: A hawkish BoE or ECB surprise would trigger a violent short squeeze in USD/JPY and a broader risk-off move, hammering crowded longs in AUD, Copper and Bitcoin.

  • DXY Under Pressure as Yields Dip – Thursday, 30 April

    Where we are: The DXY is currently trading at 98.33, down 0.39% on the day, with an intraday range of 98.07-98.97. This is a clear break lower from yesterday’s close around 98.73, and the DXY is testing the bottom of its recent range. The overnight weakness in US yields is weighing on the Greenback.

    What’s driving it: Dollar weakness is primarily driven by the overnight dip in US Treasury yields, with the 10-year currently at 4.389%. The market appears to be positioning ahead of today’s 08:30 ET data dump, particularly Advance GDP, Core PCE, and the Employment Cost Index, all of which will inform the outlook for Fed policy. While the Fed reaffirmed its data-dependent stance at its March meeting, with the dot plot pointing to two cuts in 2026, the recent hawkish tilt has diminished rate-cut expectations and even brought a rate hike in 2027 into play. Geopolitical tensions, previously a source of Dollar support, have eased somewhat, reducing safe-haven demand.

    • US 2-year yield is down 3.5 bps to 3.900%, signaling a slight easing of near-term rate expectations.
    • Speculator positioning in the Dollar is crowded long, at the 94th percentile, increasing the risk of a squeeze on any data disappointments.
    • The 10-year breakeven inflation rate is relatively stable at 2.46%, suggesting inflation expectations are not currently driving the yield move.

    NY session focus: All eyes are on the 08:30 ET data deluge. A strong GDP print above 2.2% coupled with a firm Employment Cost Index above 0.8% would likely trigger a Dollar bounce, targeting a retest of the 99.00 level. Conversely, weaker-than-expected figures could see the DXY test the 98.00 level and potentially break lower, triggering a squeeze on crowded longs. The trade that’s working right now is short Dollar against risk-on currencies, but this is at risk if the data surprises to the upside. The pain trade for the Dollar is a sustained rally driven by hotter-than-expected inflation data, forcing the market to fully price in a 2027 rate hike.

  • S&P 500 Futures Break Higher on GDP Optimism – Thursday, 30 April

    Where we are: S&P 500 futures are trading at 7198.75, up 0.65% and testing the overnight high of 7211.25. This move puts futures well above yesterday’s cash close of 7136.00 and suggests a strong open for the New York session. The market is attempting to consolidate gains above the psychological 7200 level.

    What’s driving it: Optimism ahead of this morning’s 08:30 ET US GDP print (forecast 2.2%) is providing a lift to risk assets. The slightly steeper 2s10s curve (0.5%) also reflects that the market is positioning for stronger growth. Strong earnings from mega-cap tech (Alphabet and Amazon) after yesterday’s close appear to be spilling over, particularly in futures, though there’s some conflicting information as META missed and is showing weakness in pre-market. A modestly short speculator positioning in S&P 500 futures, reflected in the net non-commercial positioning of -109,957 contracts (69th %ile) could amplify upward moves if data beats expectations.

    • The 10Y breakeven rate is creeping higher to 2.46%, suggesting inflation expectations are modestly elevated.
    • The recent FOMC statement remains a factor, though no specific language has emerged since the release to further guide markets.
    • Europe is showing broad strength, with the DAX up nearly 2.0%, which may be creating a risk-on spillover effect in US futures.

    NY session focus: All eyes are on the 08:30 ET data dump: GDP, Core PCE, Employment Cost Index, and Unemployment Claims. A beat on GDP and a miss on Core PCE could fuel a risk rally, while the opposite scenario could trigger a sharp reversal. Key levels to watch are 7211.25 on the upside and 7133.75 on the downside. The trade that’s working right now is buying the dip in mega-cap tech, but that’s at risk if the GDP data disappoints. The pain trade is a strong GDP print combined with higher inflation, forcing the market to reprice Fed tightening expectations.

  • Nasdaq 100 Aims Higher as AI Optimism Returns – Thursday, 30 April

    Where we are: Nasdaq 100 futures currently trade at 27481.25, up 0.97% on the session, pushing towards the intraday high of 27621.00. This level is well above yesterday’s cash close of 24673.24, indicating a strong overnight bid. The technical picture suggests a potential test of the 27,500 level, with support around 27,200 holding so far.

    What’s driving it: The rally is primarily fueled by renewed optimism surrounding AI earnings, with Alphabet and Amazon leading the charge after surpassing cloud computing revenue expectations and showcasing significant enterprise client wins for their AI technologies. Rising US breakeven inflation and a modestly long positioning in Nasdaq 100 futures, though not extreme, contribute to squeeze risk. While the FOMC statement from the prior session is still resonating, the immediate focus shifts to upcoming US data releases. The direction of travel will depend on how those figures alter the narrative around growth and inflation, and consequently, the Fed’s likely path.

    • Amazon jumped over 3% pre-market.
    • The 10Y breakeven inflation rate rose 2.0bp to 2.46%
    • Net non-commercial Nasdaq 100 positioning stands at +9,439 contracts.

    NY session focus: Traders will be laser-focused on the 08:30 ET release of Advance GDP, Core PCE, and the Employment Cost Index, all of which have the potential to significantly impact market sentiment. A stronger-than-expected GDP print above the 2.2% forecast could fuel further upside in the Nasdaq 100, targeting 27,700, while a weaker number could trigger a pullback towards 27,200. The trade that’s working is long tech on AI momentum. The trade at risk is short the Nasdaq, as positioning is already stretched to the long side and a data surprise could exacerbate the squeeze. The pain trade would be a hawkish surprise that sends yields sharply higher, sparking a rotation out of growth and into value.

  • Dow Futures Extend Gains; GDP Data Looms – Thursday, 30 April

    Where we are: Dow futures are currently trading at 49328, up 545 points or 1.12% on the day, having printed a high of 49405. This compares to yesterday’s cash close of 48862 and positions the index firmly in positive territory ahead of the cash open. The overnight range has been 48608-49405, reflecting a bullish move in the Asian and European sessions.

    What’s driving it: The primary driver is a continued bullish sentiment following hyperscaler earnings and strength in European equities, with the DAX up 1.92%. While the Federal Reserve reaffirmed its commitment to its current policy stance yesterday, the market’s attention is squarely focused on today’s key US data releases. Strength in energy prices, with WTI Crude near $100, is also playing a role, but any negative impact on consumer spending is yet to materialise.

    • The 10-year breakeven inflation rate sits at 2.46%, up 2bp, indicating inflation expectations are creeping higher.
    • Speculator positioning in Dow futures remains modestly short, with net non-commercial holdings at -1,731 contracts, suggesting room for a short squeeze.
    • European cash equity markets are broadly higher, with the DAX +1.92%, CAC 40 +1.49%, and FTSE 100 +1.27%, fostering a positive risk-on environment.

    NY session focus: All eyes are on the 08:30 ET release of Advance GDP, Core PCE, and Employment Cost Index data. A stronger-than-expected GDP print (forecast 2.2%) could fuel further gains, while a miss could trigger a sharp reversal. Key levels to watch are 49400 on the upside and 49000 as initial support. The current trade is long Dow futures, but a weaker-than-expected GDP print poses a significant risk. The pain trade would be a significant rally in the Dow driven by a surprisingly strong GDP number that simultaneously sees the 10-year yield break above 4.40%.

  • NY Session Tactical Brief – Wednesday, 29 April

    Regime: Mixed, as lower European equity indices and higher Brent prices offset positive sentiment from Bitcoin and US tech futures; VIX at 18.02.

    Today’s market themes:

    • BoC policy decision and press conference: Expect hawkish guidance from Macklem as inflation remains stubbornly high.
    • Hormuz Strait disruption fears support Oil: Geopolitical risks weigh as Brent hits one-month highs near $109/bbl.
    • USD awaits Fed decision: Dollar consolidating gains ahead of anticipated steady rates.

    The setup: Oil supply fears are currently the dominant driver, pushing Brent to $109. Focus now shifts to how the Fed will address these commodity price pressures at its upcoming meeting, particularly given continued indications that USD is “crowded long”. Rate decision + Powell presser could spur volatility. Watch for a DXY breakout if Powell speaks hawkishly or a sharp reversal if the Fed pivots dovishly on the recent inflation data.

    Watch list (native time per event):

    • 11:30 AEST AUD CPI m/m (forecast 1.3%, prior 0.0%)
    • 09:45 ET CAD BOC Rate Statement (forecast 2.25%, prior 2.25%)
    • 14:00 ET USD Federal Funds Rate (forecast 3.75%, prior 3.75%)

    Bias by asset:

    • DXY:
      • Direction: Neutral, awaiting Fed guidance.
      • Domestic (US): Fed policy decision, US data releases, US yield curve.
      • Cross: Risk sentiment, FX cross flows ahead of tech earnings.
      • Levels: Support 98.40, resistance 98.80.
    • EUR/USD:
      • Direction: Bearish, pressured by DXY strength.
      • Domestic (EU): Sticky Spanish inflation / peripheral spreads.
      • Cross: DXY strength, US-DE 10Y spread favoring USD, risk aversion.
      • Levels: Support 1.1690, resistance 1.1730.
    • GBP/USD (Cable):
      • Direction: Neutral.
      • Domestic (UK): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength, US-UK 10Y spread, risk-off flows.
      • Levels: Support 1.3490, resistance 1.3530.
    • USD/JPY:
      • Direction: Bullish, eyeing 160.
      • Domestic (JP): BoJ dovishness, intervention risk, JGB yields.
      • Cross: Rising US 10Y yield, DXY strength, risk-on flows.
      • Levels: Support 159.50, resistance 160.00.
    • USD/CAD (Loonie):
      • Direction: Neutral.
      • Domestic (CA): Hawkish BoC needed to push higher.
      • Cross: DXY strength, US-CA 10Y spread.
      • Levels: Support 1.3670, resistance 1.3700.
    • AUD/USD (Aussie):
      • Direction: Bearish, after mixed CPI data.
      • Domestic (AU): Mixed CPI response, RBA watch.
      • Cross: DXY strength, US-AU 10Y spread, China growth concerns.
      • Levels: Support 0.7150, resistance 0.7200.
    • NZD/USD (Kiwi):
      • Direction: Bearish, pressed by the RBNZ’s easing bias.
      • Domestic (NZ): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength, US-NZ 10Y spread, risk-off flows.
      • Levels: Support 0.5850, resistance 0.5900.
    • USD/CHF (Swissy):
      • Direction: Bullish, supported by the SNB’s easing bias.
      • Domestic (CH): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength, safe-haven outflows from CHF.
      • Levels: Support 0.7880, resistance 0.7910.
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): Neutral.
      • Domestic: Relative BoE and ECB stance, relative yields.
      • Cross: DXY strength, risk sentiment.
      • Levels: Monitor key support and resistance.
    • XAU (Gold):
      • Direction: Bearish, pressured by real yields.
      • Domestic (asset-specific): Rising real yields pressuring gold.
      • Cross: DXY strength, risk aversion.
      • Levels: Support 4550, resistance 4630.
    • XAG (Silver):
      • Direction: Bearish, impacted by industrial demand.
      • Domestic (asset-specific): Demand mixed and impacted by real yields.
      • Cross: DXY strength, risk aversion.
      • Levels: Support 7180, resistance 7380.
    • WTI / Brent:
      • Direction: Bullish, supply disruption fears.
      • Domestic (asset-specific): Geopolitical factors driving surge.
      • Cross: Weaker DXY could add fuel to rally, risk on.
      • Levels: WTI support 100.00, Brent support 105.00.
    • Copper:
      • Direction: Neutral, but China key.
      • Domestic (asset-specific): Eyes on China growth, LME stock levels.
      • Cross: Global growth sentiment.
      • Levels: Support 595, resistance 603.
    • SPX:
      • Direction: Sideways, waiting on Fed and earnings.
      • Domestic (US): Eyes on earnings and Fed stance.
      • Cross: VIX regime, global macro.
      • Levels: Futures support 7160, resistance 7190.
    • NDX:
      • Direction: Neutral, focused on mega-cap earnings.
      • Domestic (US): Earnings and AI optimism.
      • Cross: Rates sensitive, watching VIX.
      • Levels: Support 27190, resistance 27320.
    • US30 (Dow):
      • Direction: Neutral, industrials in focus.
      • Domestic (US): Earnings focus and overall US data.
      • Cross: Bond yield reaction.
      • Levels: Support 49200, resistance 49420.
    • UK100 (FTSE):
      • Direction: Bearish, underperforming on Sterling strength.
      • Domestic (UK): Sterling and Gilt yields.
      • Cross: Global sentiment.
      • Levels: Support 22280, resistance 22450.
    • DAX:
      • Direction: Bearish, dragged by German yields.
      • Domestic (DE): German yields and data.
      • Cross: US tech and risk.
      • Levels: Support 23900, resistance 24100.
    • Nikkei:
      • Direction: Bearish, after BoJ inaction.
      • Domestic (JP): JPY levels and JGB yields.
      • Cross: US tech, risk.
      • Levels: Support 59700, resistance 60650.
    • BTC:
      • Direction: Bullish, trending higher.
      • Domestic (asset-specific): ETF flows supportive.
      • Cross: Risk-on environment.
      • Levels: Support 76000, resistance 78000.

    Positioning watch: USD and AUD are crowded longs, while JPY and NZD are crowded shorts. A dovish Fed surprise or positive Japanese data could trigger significant short squeezes in the JPY and NZD.

    The pain trade: A dovish hold from the Fed, coupled with commentary suggesting openness to rate cuts later this year, would trigger a sharp DXY sell-off and a rally in risk assets, catching crowded USD longs off guard.

  • DXY Sees Safe-Haven Bid; Fed Watch in Focus – Wednesday, 29 April

    Where we are: The Dollar Index is currently trading at 98.61, up +0.19% on the session. Overnight, the DXY has traded in a tight 98.41-98.63 range, consolidating gains after yesterday’s risk-off move. Current levels are holding above last week’s close but the market is in wait-and-see mode ahead of the Fed.

    What’s driving it: The dollar is catching a bid on safe-haven flows as risk sentiment sours, with stocks falling and oil rising amid persistent inflation worries. Domestically, all eyes are on the Fed’s decision and statement due at 14:00 ET, as well as Chair Powell’s press conference at 14:30 ET. The market broadly expects the Fed to hold rates steady in the 4.25-4.50% range, but the focus is on forward guidance and any hints about the timing of potential rate cuts given the still-sticky inflation picture.

    • US 10Y Real Yields have been rising to 1.91%, which traditionally acts as a headwind for gold.
    • The US 2Y yield is up 3.3bp on the day to 3.879, signaling a potential re-think on the Fed’s rate cut trajectory.
    • Speculator positioning in the Dollar Index is crowded long, at the 94th percentile, raising the risk of a sharp squeeze lower if the Fed strikes a more dovish tone than anticipated.

    NY session focus: Traders are squarely focused on the Fed events at 14:00 ET and 14:30 ET, with any deviation from the expected hold potentially triggering significant volatility. Key levels to watch are 98.40 as intraday support and 98.80 as resistance. The flattening 2s10s curve suggests the market is bracing for a potential policy mistake. The working trade is to fade any initial hawkish reaction to the Fed, given the crowded long positioning. The pain trade is a hawkish surprise that triggers a dollar squeeze and a sharp sell-off in risk assets.

  • S&P 500 Braces for Fed as Yields Creep Higher – Wednesday, 29 April

    Where we are: S&P 500 futures are currently trading at 7169.25, down 4 points, or -0.06%, within a daily range of 7161.25 to 7188.25. The cash S&P 500 closed yesterday at 7138.80, putting the futures contract slightly below that level pre-open. The index faces resistance around the 7188 intraday high and support near 7161.

    What’s driving it: The market is primarily focused on today’s Federal Reserve announcements, with rates expected to remain unchanged at 3.75%. Rising US yields are putting some pressure on equities, with the 10-year yield at 4.371%, up 1.6bp on the day. This rise in yields is also reflected in the 2-year yield, which is up 3.3bp to 3.879%. Despite the lack of an expected rate change, the FOMC statement and subsequent press conference at 14:30 ET will be crucial for assessing the Fed’s outlook on inflation and future policy direction.

    • The 10-year real yield is rising to 1.91% indicating that hawkish inflation expectations are putting pressure on gold.
    • Speculator positioning in S&P 500 futures is modestly short, at -109,957 contracts, suggesting a potential for a short squeeze if the Fed strikes a dovish tone.
    • WTI crude oil continues its ascent, trading above $91 a barrel which could stoke inflation concerns.

    NY session focus: All eyes are on the Fed today, with the Federal Funds Rate announcement and FOMC Statement at 14:00 ET, followed by the FOMC Press Conference at 14:30 ET. Traders will be scrutinizing Powell’s language for any hints about future rate cuts or concerns about inflation. Watch for reactions around 7200 (resistance) and 7130 (support). The trade that’s working is fading the rallies and shorting on a hawkish Fed tone. The trade at risk is buying into this pre-Fed dip. The pain trade is a dovish Fed coupled with strong tech earnings after the close, triggering a significant risk-on rally.

  • Nasdaq 100 Braces for Powell as Earnings Roll In – Wednesday, 29 April

    Where we are: Nasdaq futures currently trade at 27236.75, up 0.11% on the day, holding within today’s 27193.50-27317.00 range. Cash NDX is at 24663.80, a touch firmer. We’re seeing some consolidation after yesterday’s choppiness and as participants prepare for the Fed’s decision today. The index is finding support around recent levels but faces headwinds from rising real yields.

    What’s driving it: Today’s primary driver is the FOMC meeting and press conference, with markets universally expecting rates to remain unchanged at 3.75%. The focus will be on forward guidance, particularly given the recent uptick in US 10Y real yields, now at 1.91%, which poses a headwind for growth stocks. Also weighing is the mixed picture from tech earnings; some hyperscalers are showing robust numbers while AI infrastructure companies are facing questions, as underscored by reports of OpenAI’s growth challenges.

    • The US 10Y yield is edging higher, currently at 4.371%, reflecting a slight hawkish tilt in market expectations ahead of the Fed.
    • The VIX remains relatively subdued at 18.02, suggesting a degree of complacency despite the uncertainties around earnings and Fed policy.
    • Net non-commercial Nasdaq 100 positioning is modestly long, but at the 4th percentile over the last 52 weeks, limiting the scope for a major short squeeze.

    NY session focus: All eyes will be on the 14:00 ET FOMC announcement and the subsequent 14:30 ET press conference. Traders will be scrutinising Powell’s comments for any hints about the future pace of tightening and the Fed’s reaction function to inflation. Key levels to watch are resistance around 27300 and support near 27200 on the futures. The working trade is to fade any knee-jerk reaction higher in Nasdaq futures on a dovish tilt, as the underlying yield backdrop will ultimately reassert itself. The risk is a hawkish surprise that sends yields sharply higher, triggering a tech selloff. The pain trade? Powell delivers an unambiguously dovish message and tech names rip higher, negating the real yield squeeze thesis.

  • Dow Jones Braces for Volatility Amid Fed Rate Decision – Wednesday, 29 April

    Where we are: Dow futures currently trade at 49258, down 99 points or 0.20% on the day, having traded in a 49205-49417 range so far today. This is modestly below yesterday’s cash close of 49142. The index remains sensitive to shifts in risk sentiment given Big Tech earnings looming after the bell.

    What’s driving it: All eyes are on today’s FOMC meeting, where the Federal Funds Rate is expected to remain unchanged at 3.75%. However, the market will scrutinize the FOMC statement and Chair Powell’s press conference for any hints about future policy direction, especially concerning inflation and growth. Rising real yields, currently at 1.91%, are putting downward pressure on risk assets and offsetting the positive effects of stable breakeven inflation at 2.44%.

    • The 2s10s curve is at 0.52%, reflecting a modestly steepening bias.
    • VIX is lower on the day, decreasing -0.69 to 18.02.
    • Speculator positioning in Dow Jones futures is modestly short, with net non-commercial positions at -1,731 contracts, which is at the 52nd percentile over the past 52 weeks and unlikely to trigger any major position squeeze.

    NY session focus: The market’s direction hinges on the 14:00 ET FOMC rate decision and statement, followed by the 14:30 ET press conference. A hawkish tone could send the Dow lower, potentially testing support around 49000. Conversely, dovish signals could propel the index toward 49500. Focus will also shift to earnings releases from major tech companies after the close. The working trade is short volatility into the event; the at-risk trade is a long Dow position premised on a dovish surprise. The pain trade is a hawkish Fed that also signals openness to future easing.

  • NY Session Tactical Brief – Tuesday, 28 April

    Regime: Risk-off, as Nasdaq futures lead declines and gold tests three-week lows, driven by persistent inflation fears and higher front-end yields (US 2Y +3.5bp).

    Today’s market themes:

    • OPEC+ uncertainty: UAE exit sparks oil supply concerns, boosting crude prices.
    • BOJ disappointment: Yen weakens as BOJ holds policy, defying hawkish expectations.
    • Australian Inflation: RBA to watch closely.

    The setup: Market participants are repricing for potentially persistent inflation with focus on the Fed and data dependency. Rising yields and a stronger USD are weighing on risk assets. Front-end US yields are climbing, driving DXY higher (98.58) and pressuring equities. Watch for follow-through in NY session, especially tech given the Nasdaq’s underperformance.

    Watch list (native time per event):

    • 10:00 ET USD: CB Consumer Confidence (forecast 89.0, prior 91.8)
    • 11:30 AEST AUD: CPI y/y (forecast 4.8%, prior 3.7%)
    • 12:30 NZT NZD: RBNZ Gov Breman Speaks

    Bias by asset:

    • DXY:
      • Direction: Bullish.
      • Domestic (US): Fed likely to maintain hawkish stance given sticky inflation.
      • Cross: Risk-off sentiment and rising yields support demand.
      • Levels: Resistance at 98.75, support at 98.25.
    • EUR/USD:
      • Direction: Bearish.
      • Domestic (EU): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength and widening US-DE 10Y spread pressure pair.
      • Levels: Resistance at 1.1725, support at 1.1675.
    • GBP/USD (Cable):
      • Direction: Bearish.
      • Domestic (UK): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength and widening US-UK 10Y spread weighs on Cable.
      • Levels: Resistance at 1.3540, support at 1.3460.
    • USD/JPY:
      • Direction: Bullish.
      • Domestic (JP): BoJ holds steady, reinforcing dovish stance. Intervention risk remains.
      • Cross: US 10Y yield rise widens US-JP yield differential.
      • Levels: Resistance at 159.80, support at 158.95.
    • USD/CAD (Loonie):
      • Direction: Bullish.
      • Domestic (CA): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength and US-CA 10Y spread support pair.
      • Levels: Resistance at 1.3680, support at 1.3610.
    • AUD/USD (Aussie):
      • Direction: Bearish.
      • Domestic (AU): CPI data likely to inform RBA stance on rates.
      • Cross: DXY strength, China growth concerns weigh.
      • Levels: Resistance at 0.7195, support at 0.7150.
    • NZD/USD (Kiwi):
      • Direction: Bearish.
      • Domestic (NZ): RBNZ Gov Breman speaks; further easing priced in.
      • Cross: DXY strength and risk-off sentiment pressure Kiwi.
      • Levels: Resistance at 0.5920, support at 0.5865.
    • USD/CHF (Swissy):
      • Direction: Bullish.
      • Domestic (CH): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength and safe-haven unwinding support pair.
      • Levels: Resistance at 0.7910, support at 0.7850.
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP neutral, EUR/JPY bearish, GBP/JPY bearish.
      • Domestic: BoJ dovishness supports GBP/JPY.
      • Cross: DXY strength impacts all crosses; risk-off benefits JPY.
      • Levels: Watch key support/resistance levels.
    • XAU (Gold):
      • Direction: Bearish.
      • Domestic (asset-specific): Rising real yields weigh on gold.
      • Cross: DXY strength further pressures gold.
      • Levels: Resistance at 4600, support at 4565.
    • XAG (Silver):
      • Direction: Bearish.
      • Domestic (asset-specific): Industrial demand concerns add to pressure.
      • Cross: DXY strength and risk-off sentiment drag silver lower.
      • Levels: Resistance at 7250, support at 7200.
    • WTI / Brent:
      • Direction: Bullish.
      • Domestic (asset-specific): UAE withdrawal from OPEC creates supply uncertainty.
      • Cross: Risk-off sentiment could limit upside despite supply concerns.
      • Levels: WTI resistance at $102, Brent resistance at $106.
    • Copper:
      • Direction: Bearish.
      • Domestic (asset-specific): China growth concerns weigh on demand.
      • Cross: DXY strength adds to downward pressure.
      • Levels: Resistance at 600, support at 593.
    • SPX:
      • Direction: Bearish.
      • Domestic (US): Rising yields and mixed earnings reports weigh.
      • Cross: VIX trending higher; risk-off mood dominates.
      • Levels: Futures resistance at 7225, cash support at 7145.
    • NDX:
      • Direction: Bearish.
      • Domestic (US): Higher real yields and mixed earnings data weighs heavy.
      • Cross: Sensitive to increased rates and hawkish Fed stance.
      • Levels: Resistance at 27500, support at 27000.
    • US30 (Dow):
      • Direction: Neutral.
      • Domestic (US): No clear catalyst — sensitive to overall market tone.
      • Cross: Resilient reaction to bond-yield movement in last session.
      • Levels: Resistance at 49500, support at 49300.
    • UK100 (FTSE):
      • Direction: Bearish.
      • Domestic (UK): Sterling weakness and global factors dominate.
      • Cross: Reacting sharply to global risk-off.
      • Levels: Resistance at 22500, support at 22400.
    • DAX:
      • Direction: Bearish.
      • Domestic (DE): Cautious outlook from ECB surveys.
      • Cross: Risk-off and tech weakness weigh on DAX.
      • Levels: Resistance at 24150, support at 23900.
    • Nikkei:
      • Direction: Bearish.
      • Domestic (JP): BoJ inaction pressures Nikkei.
      • Cross: Risk regime compounds effects on the downside.
      • Levels: Resistance at 60600, support at 59700.
    • BTC:
      • Direction: Bearish.
      • Domestic (asset-specific): Negative sentiment, ETF outflows.
      • Cross: Correlations with Nasdaq and risk assets weighing.
      • Levels: Resistance at 77500, support at 76000.

    Positioning watch: The crowded JPY short (0th percentile) is vulnerable to a squeeze on any surprise shift in BoJ policy or hawkish rhetoric. AUD and Bitcoin long positions (>85th percentile) are also at risk of a correction given the current risk-off environment.

    The pain trade: A dovish surprise from the Fed, reversing the yield spike and triggering a short squeeze in JPY, would inflict maximum pain on crowded short positions and boost risk assets.

  • Dollar Firms as Yields Creep Higher – Tuesday, 28 April

    Where we are: The DXY is currently trading at 98.58, up 0.30% on the day, having tested a high of 98.72. This represents a near three-week high for the index, exceeding yesterday’s close. The move is occurring amid a broad risk-off tone in futures, setting up for a potentially interesting NY session.

    What’s driving it: The dollar’s strength is primarily driven by a recalibration in US yields, particularly at the front end, with the 2Y yield trading at 3.848, up 3.5bp on the day. This move reflects persistent inflation concerns fuelled by rising oil prices and uncertainty surrounding Iran’s plans for the Strait of Hormuz, pushing back expectations for Fed easing. The crowded long positioning in the USD also means any hawkish shift or risk-off bid can trigger outsized moves as shorts cover, which is likely contributing to the current dynamic.

    • US 2Y yield up 3.5bp to 3.848 indicates a front-end driven repricing of rate expectations.
    • CFTC data shows a crowded long USD position (94th percentile), increasing squeeze risk.
    • Rising oil prices, with WTI Crude at $91.06, are contributing to inflationary concerns and supporting the dollar.

    NY session focus: Today’s session will be dominated by the 10:00 ET release of CB Consumer Confidence, with a forecast of 89.0 versus a previous 91.8. A weaker-than-expected print could trigger a temporary pullback in the dollar, though the underlying support from yields should limit the downside. A stronger print will likely fuel further gains, targeting the 99.00 level in the DXY. Keep a close watch on risk sentiment as well, with S&P 500 futures trading down almost 0.6%; sustained risk aversion will provide additional tailwinds for the greenback. The pain trade for the dollar is a surprise dovish signal from a Fed official that forces a re-think of near-term rate expectations.