Category: US

  • 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.

  • S&P 500 Faces AI Headwinds; Oil Offers Support – Tuesday, 28 April

    Where we are: The S&P 500 futures contract is currently trading at 7164.50, down 0.58% on the day, trading within a range of 7147.75 to 7223.00. This is a notable pullback from the cash close at 7173.90, and suggests some pressure heading into the New York open. We’re watching for a test of the lower end of that overnight range.

    What’s driving it: The primary driver is unease around the AI trade. A Wall Street Journal report highlighting missed targets at OpenAI has triggered selling pressure in software and hardware names, pulling down the S&P 500 futures. Rising Treasury yields, with the 2-year at 3.848% and the 10-year at 4.364%, are not helping risk sentiment. Counteracting this, however, is strength in energy stocks fueled by rising oil prices; WTI crude is above $91.00/bbl after the latest Iran-related headlines.

    • CB Consumer Confidence at 10:00 ET will be closely watched, especially after last month’s dip. A further decline below the forecast of 89.0 will reinforce the narrative of a slowing consumer and pressure the S&P 500.
    • The rally in the 10-year breakeven inflation rate to 2.44%, while positive on the surface, is likely contributing to concerns about persistent inflation and the potential for continued hawkishness from the Fed.
    • Despite the mildly short positioning in S&P 500 futures (-109,957 contracts), the 69th percentile net positioning suggests there is still room for shorts to increase exposure if the AI-driven selloff intensifies.

    NY session focus: The session will be dictated by the reaction to Consumer Confidence at 10:00 ET. Support lies at the overnight low of 7147.75. A break below that and we could test 7100. Upside resistance sits near the overnight high of 7223.00. The trade that’s working is shorting the AI names within the broader tech sector, but be mindful of energy strength potentially offering some offset. The at-risk trade is long-duration bonds; stick to the short side. The pain trade for the S&P 500 is a strong Consumer Confidence print reversing the morning selloff, triggering a violent short squeeze into tomorrow’s tech earnings.

  • Nasdaq Futures Under Pressure as AI Concerns Mount – Tuesday, 28 April

    Where we are: Nasdaq 100 futures are currently trading at 27127.25, down 304.25 points or 1.11% on the session, and trading near the low end of today’s 27037.75-27511.75 range. This contrasts with yesterday’s cash close of 24887.10, a gain of 0.35%. The drop reflects growing unease with stretched valuations within the AI sector, pressuring tech stocks, while traditional sectors are comparatively robust.

    What’s driving it: Concerns over the sustainability of AI-driven growth are the primary driver today. Reports that OpenAI has missed its financial targets are triggering a reassessment of the AI investment boom, pressuring stocks such as Nvidia and Oracle. This pullback is occurring despite a backdrop of a slightly steeper 2s10s curve at 0.57% and a rising 10Y breakeven inflation rate at 2.44%, suggesting some degree of inflation expectation anchoring. The rise in the 10Y yield to 4.364, up 1.6bp, and the 2Y yield to 3.848, up 3.5bp, reflects this shift in expectations, adding pressure on growth stocks.

    • The 1.11% drop in Nasdaq futures is signalling a clear shift in risk sentiment.
    • Weakness in AI leaders like Nvidia (down 2% pre-market) is exacerbating the sell-off.
    • CFTC data shows that net non-commercial positioning is still modestly long at +9,439 contracts, representing the 4th percentile of its 52-week range, suggesting limited room for further long liquidation but ample opportunity for new shorts to pile on.

    NY session focus: Watch for the 10:00 ET release of the CB Consumer Confidence data. A miss of the 89.0 forecast could further weigh on sentiment, potentially pushing Nasdaq futures lower towards the 27000 level. Key levels to watch are 27000 as initial support, and 26800 as the next major support zone. The short trade in AI-exposed names is working for now, but a sharp reversal on strong earnings from Meta, Microsoft, or Alphabet could trigger a significant squeeze. The pain trade would be a strong showing from consumer confidence, sparking a broader risk rally that catches the AI bears offside.

  • Dow Jones Buckles as Tech Rout Deepens – Tuesday, 28 April

    Where we are: Dow futures are currently trading at 49465, up 115 points or 0.23% on the day, hovering near the top of today’s 49320-49545 range. This compares to yesterday’s Dow Jones cash close around 49168. While the Dow is holding up relatively well, the broader market is under pressure, with S&P 500 and Nasdaq futures both significantly lower.

    What’s driving it: The Dow is benefiting from relative strength in traditional and defensive sectors as the tech sector faces a major reckoning. The negative sentiment is fueled by reports of OpenAI missing its targets and sparking renewed concerns about the sustainability of AI-driven capital expenditure. This is playing out in a rotation away from tech and towards more established, value-oriented names, directly boosting the Dow. Rising US yields aren’t helping the broader picture, with the 2Y at 3.848% and the 10Y at 4.364%, putting further pressure on growth stocks.

    • UPS beating earnings expectations is providing a modest tailwind, confirming the underlying health of traditional commerce.
    • The modestly short net positioning in Dow futures (-1,731 contracts) leaves room for upside surprise.
    • WTI crude oil at $91.06 is lifting energy stocks within the Dow, further contributing to its outperformance.

    NY session focus: Watch the 10:00 ET release of the CB Consumer Confidence data; a miss on the 89.0 forecast could exacerbate the risk-off tone. Key level to watch is 49,500 on the upside – a break above that would signal continuation of the rotation trade. Conversely, a break below 49,300 would suggest the tech weakness is dragging down even the Dow. The current trade is being long Dow versus short Nasdaq. The risk trade is that Meta, Microsoft, and Alphabet earnings, due after tomorrow’s close, quell AI fears and initiate a renewed tech rally. The pain trade here is a violent reversal that sees tech outperform and the Dow sharply underperform, negating this morning’s relative strength.

  • NY Session Tactical Brief – Monday, 27 April

    Today’s market themes:

    • Iran tensions easing: potential peace proposal buoying risk assets, weighing on oil.
    • BOJ hold: yen weakness continues post-policy announcement.
    • Crowded positioning: squeeze risk in USD, JPY, AUD, BTC, and Copper.

    The setup: The market is pricing in reduced geopolitical risk following reports of a potential peace proposal from Iran, triggering a risk-on move. Expect continued USD weakness and commodity pullback near-term. Watch for a breakout above 216.00 in GBP/JPY to confirm bullish momentum. US 10Y at 4.323%.

    Watch list (London time):

    • 13:30 [Medium] USD: CB Consumer Confidence (forecast 97.0, prior 98.7)
    • 15:00 [Low] US: Richmond Manufacturing Index (forecast -5, prior -11)
    • Any BOJ speaker comments regarding future policy adjustments.

    Bias by asset:

    • DXY: Down, risk-on sentiment and unwinding of crowded longs, target 97.80.
    • EUR: Up, weaker dollar and wider US-DE 10Y spread (+130bp), target 1.1800.
    • GBP: Up, risk-on and slightly narrower US-UK 10Y (-63bp), targeting 1.3600.
    • JPY: Down, BOJ inaction fuels yen weakness; US-JP 10Y at +185bp.
    • CAD: Up, weaker dollar, supported by WTI strength.
    • AUD: Up, driven by energy prices and weaker USD.
    • NZD: Up, benefiting from risk-on sentiment, supported by reports of easing tensions.
    • CHF: Down, weaker dollar as DXY falls and risk appetite returns.
    • EUR/GBP, EUR/JPY, GBP/JPY: Neutral, watching cross currents of risk and individual currency drivers.
    • XAU (Gold): Neutral, real yields stable but safe haven demand ebbing.
    • XAG (Silver): Neutral, trading lower with gold; keep an eye on the gold/silver ratio.
    • WTI / Brent: Mixed, Iran headlines offset bullish drivers; watch for $98 WTI break.
    • Copper: Down, concerns over China’s growth trajectory.
    • SPX: Up, supported by risk-on sentiment, targeting 7220.
    • NDX: Up, benefiting from lower rates and mega-cap momentum.
    • US30: Neutral, mixed picture; impacted by rising oil costs and potential peace.
    • UK100: Neutral, struggling due to strength in GBP and commodity sector drag.
    • DAX: Up, driven by easing tensions regarding Iran.
    • Nikkei: Up, technology sector strength and yen weakness persist.
    • BTC: Down, risk-off sentiment in crypto; crowded longs suggest downside risk.

    Positioning watch: CFTC data reveals crowded longs in USD, AUD, Copper, and Bitcoin, increasing squeeze risk on any negative news. JPY and NZD are crowded shorts, vulnerable to positive surprises.

    The pain trade: A surprise hawkish signal from a Fed speaker would crush risk assets, triggering a scramble to cover USD shorts and unwind equity longs.

  • Dollar Under Pressure as US-Iran Talks Eyed – Monday, 27 April

    Where we are: The DXY currently trades at 98.14, down 0.28 after an overnight range of 98.03-98.48. The Greenback is underperforming against most G10 currencies as risk sentiment improves slightly ahead of the New York open. This puts the index well below Friday’s close, continuing the downward trend.

    What’s driving it: The primary driver appears to be renewed optimism surrounding potential US-Iran talks, as highlighted by wire reports. This is weighing on the safe-haven demand for the Dollar. The US 10Y yield is currently at 4.323%, up slightly from its overnight low, but this isn’t providing sufficient support to offset the geopolitical developments. Speculator positioning remains crowded long in the USD, at the 94th percentile, increasing the risk of a squeeze if risk-on sentiment persists.

    • Reuters: “Dollar steady as traders eye US-Iran talks, central banks”
    • Falling US 10Y Real Yield (TIPS): 1.92% is a gold tailwind
    • CFTC data shows speculators are net long USD, at the 94th percentile (52-week), and down -187 contracts w/w.

    NY session focus: With no major US data releases scheduled before the New York open, the focus will remain on developments surrounding US-Iran negotiations. Any signs of progress could trigger a further decline in the Dollar. Watch for a break below the 98.00 level on the DXY; if it breaks this could trigger a sharper move lower given the crowded long positioning. The trade that’s working right now is short USD against risk-on currencies. The trade that’s at risk is long USD and safe-haven currencies. The pain trade for the Dollar is a swift resolution of US-Iran tensions.

  • S&P 500 Grinds Higher on Earnings Optimism – Monday, 27 April

    Where we are: S&P 500 futures currently trade at 7191.50, up 0.10% on the day and near the top of today’s 7172.00-7208.25 range. Cash SPX closed Friday at a record, and futures are consolidating those gains in thin pre-market trade. We’re seeing some consolidation after that ninth record close, but the underlying bid remains strong.

    What’s driving it: Optimism around earnings, particularly in the tech sector, continues to support the index. Morgan Stanley’s bullish call, stating little chance of a retreat due to earnings, capex, and AI adoption momentum, is resonating with investors, overshadowing concerns about Middle East tensions. The DXY is softening, currently at 98.14, which provides a tailwind for risk assets. US 10Y yields are modestly higher at 4.323%, but the real rate remains contained, avoiding equity headwinds.

    • MarketWatch headline: “Why Morgan Stanley sees little possibility of a stock-market retreat” is reinforcing the bullish narrative.
    • The retreat in the DXY to 98.14 offers some support.
    • CFTC data shows net non-commercial positioning in S&P 500 futures is modestly short (-109,957 contracts), suggesting limited room for a sharp squeeze higher from here.

    NY session focus: The focus shifts to tech earnings this week, with Microsoft, Alphabet, Amazon, and Apple reporting on Wednesday and Thursday. Watch for guidance on AI spending. Key levels to watch are 7200 as initial resistance and 7170 as near-term support. The current trade is cautiously long, waiting for confirmation from earnings. The risk trade is a disappointment on the AI capex outlook, especially after Qualcomm’s surge on its OpenAI/Meditek partnership. The pain trade is a major upside surprise from earnings that sends the SPX to new record highs above 7250.

  • Nasdaq 100 Poised to Extend Record Run – Monday, 27 April

    Where we are: Nasdaq futures are currently trading at 27431.25, up 0.14% on the session, having traded in a tight 27345.75-27541.00 range overnight. This sits just below the upper end of that range, and implies a slightly softer open for the cash market which closed Friday near all-time highs. Despite the modest overnight move, the cash Nasdaq 100 closed at 24836.60 on Friday, a substantial 0.89% gain on the day.

    What’s driving it: Optimism surrounding potential energy export resumption from the Middle East, as suggested by reports of Iran being open to negotiations, is helping to underpin risk sentiment despite a lack of tangible progress. The broader tech sector also continues to benefit from the AI narrative, especially in light of Qualcomm’s collaboration with OpenAI and Meditek. While the DXY is weaker at 98.14, the US 10-year yield is firming slightly, now at 4.323%, showing some resilience in the face of broader risk-on sentiment.

    • Yahoo Finance: Qualcomm stock soars, Nvidia tops $5 trillion again, with Big Tech Q1 updates on deck
    • Reports indicate that Iran is open to allow vessels to cross the Strait of Hormuz should the US lift its blockade, potentially paving the way for the return of tanker exports from the region.
    • CFTC data shows net non-commercial positions in the Nasdaq 100 modestly long but near the 4th percentile, suggesting room for further long accumulation, and limited downside pressure from positioning if sentiment were to sour.

    NY session focus: Look for initial direction from the open, and how the cash market reacts to Friday’s close. The main event to watch is any headlines related to Big Tech Q1 earnings, due mid-week. Key levels to monitor are 27500 in the futures for a test of resistance, and 27345 as initial support. The trade that’s working remains buying dips in the tech sector, while the at-risk trade is shorting tech given the persistent bullish narrative and relatively light positioning. The pain trade here is a sudden risk-off move driven by geopolitical flare-ups, catching complacent longs off guard and leading to a swift correction.

  • Dow Jones Remains Rangebound Despite Tech Earnings – Monday, 27 April

    Where we are: Dow futures are clinging to modest gains at 49347, up just 18 points, having traded in a narrow 49230-49384 range overnight. This is a whisker above Friday’s cash close of 49231. Cash opened sharply lower in Europe and has been making ground back toward the top of Friday’s range as we head into the New York open. The Dow is underperforming the broader market as S&P 500 futures trade +0.10% and Nasdaq futures +0.14%.

    What’s driving it: Mixed sentiment prevails as traders weigh ongoing geopolitical tensions – particularly the impasse in Iran talks – against anticipation of upcoming tech earnings. Focus is squarely on mega-cap tech names with Microsoft, Alphabet, Amazon, and Apple reporting this week. The muted performance of tech stocks in pre-market trading suggests a cautious approach ahead of these key releases. Meanwhile, the small rally in yields (US 10Y at 4.323%) is providing modest headwinds and suggests lingering inflation concerns. Positioning in Dow futures shows a modest net short of -1,731 contracts, leaving some room for a short squeeze if sentiment turns bullish.

    • AP headline: “Wall Street mixed early ahead of tech earnings while Iran talks are at an impasse.”
    • The US 10Y yield is up 0.9 bps to 4.323%, weighing on risk sentiment.
    • Dow Jones positioning remains modestly short and below the median at the 52nd percentile, offering some scope for a squeeze.

    NY session focus: Keep an eye on the headlines around Iran talks, as this could swing sentiment quickly. Focus shifts to 15:30 London time (10:30 NY) with Fed Vice Chair Barr speaking. Key levels to watch are 49230 as support and 49384 as resistance. The trade that’s working right now is fading any dips towards the lower end of the overnight range. The trade at risk is chasing the Dow higher ahead of tech earnings given the sector’s underperformance. The pain trade is a sustained breakout above 49400, triggering a short squeeze and further gains.