Category: US

  • US30 Extends Record Run Ahead of Fed Decision – Tuesday, 16 June

    Where we are: The US30 cash index is holding its ground just below yesterday’s historic peaks, currently trading around 40,210 after a 350-point surge pushed the index to a fresh record closing high on Monday. The overnight futures range has been tight, consolidating between 40,150 and 40,260, as European cash markets digest yesterday’s massive risk-on impulse. We are carving out a solid consolidation base above the previous resistance-turned-support zone at 39,950, setting up a constructive platform ahead of the NY bell. This pause reflects a natural breathing spell after a blistering three-day rally that has fundamentally reset the near-term technical outlook.

    What’s driving it: The primary catalyst keeping the Dow supported at highs is the repricing of US inflation risks, which has driven a pullback in Treasury yields ahead of tomorrow’s pivotal Federal Reserve meeting. This relief stems from yesterday’s breakthrough US-Iran agreement to reopen the Strait of Hormuz, effectively defusing a structural energy shock and anchoring WTI crude at $95. Crucially, the US interest rate market is pricing out hawkish tail risks even as Chairman Warsh prepares to push for structural overhauls to the monetary framework in his debut meeting. Furthermore, we are seeing a massive rotational bid out of tech heavyweights—with Microsoft and Alphabet trimming gains—into industrial and blue-chip Dow constituents.

    • US 10-year real yields (TIPS) remain elevated at 2.17%, presenting a structural headwind for gold but serving as a validation of US growth resilience which underpins the Dow’s cyclical components.
    • US corporate activity is firing on all cylinders, highlighted by SpaceX acquiring Cursor for $60 billion and surging 40% since its IPO, which is feeding a broader risk-on rotation into blue-chips.
    • CFTC speculator positioning shows non-commercial accounts remain modestly net short at -2,539 contracts (56th percentile of open interest), meaning the structural pain trade is still higher as late shorts are forced to cover.

    NY session focus: The immediate focus for the New York session centers on the pre-market retail sales print at 08:30 ET, which will set the tactical tone for cyclical versus defensive sector performance. Tactically, we are buying any shallow intraday dips toward 40,120, targeting an extension toward the 40,500 psychological resistance level. The trade at risk is chasing the momentum in expensive tech names, which face valuation pressure from the 10-year yield holding at 4.48%. The ultimate pain trade for the session is a squeeze higher through 40,350 that forces under-allocated real-money accounts to chase the breakout.

  • Nasdaq Shorts Highly Vulnerable to Fed Squeeze – Tuesday, 16 June

    Where we are: Nasdaq 100 futures are trading soft at 19,820, down 0.4% ahead of the New York cash open as mega-cap tech faces some rotation. The overnight range has been contained between 19,780 and 19,890, consolidating just below the previous session’s highs. We are seeing a clear divergence as the Dow pushes record highs, leaving the tech-heavy index testing its 20-day moving average near 19,750. A break below this support opens the door to 19,500, while bulls need a reclaim of 19,950 to spark a broader run.

    What’s driving it: US Treasury yields are keeping equity valuations on a tight leash, with the 10-year yield holding at 4.48% and the 2-year at 4.09% ahead of tomorrow’s critical FOMC decision. This rates backdrop is compounding the pressure on high-duration tech, especially with US 10-year real yields rising to 2.17% to create a structural headwind for growth multiples. Domestically, corporate headlines are driving massive dispersion, highlighted by SpaceX’s $60 billion acquisition of Cursor, which is prompting traders to fund these deals by trimming existing core holdings in Microsoft, Meta, and Alphabet. This rotation is taking place against a backdrop of easing geopolitical energy risks as the US-Iran agreement to reopen the Strait of Hormuz pulls the terminal inflation premium out of the curve.

    • The US 10-year real yield (TIPS) has climbed to 2.17%, raising the hurdle rate for high-multiple secular growth and capping the Nasdaq’s upside potential.
    • Megacap tech leaders are showing signs of exhaustion and trimming gains as capital rotates into specific corporate catalysts, including SpaceX’s 8% surge following its $60 billion Cursor acquisition.
    • CFTC non-commercial positioning is crowded short at just the 10th percentile of its 52-week range (-1,349 contracts), creating an explosive short-squeeze risk if tomorrow’s Fed meeting delivers a dovish surprise.

    NY session focus: Focus now shifts to the pre-market retail sales print at 08:30 ET, where any sign of consumer weakness could trigger a rapid short squeeze ahead of tomorrow’s FOMC. The trade that is working is long Dow/short Nasdaq relative value, capturing the cyclical rotation fueled by the easing energy risk. Conversely, chasing megacap tech shorts at these levels is highly risky given the thin net non-commercial positioning. The pain trade is a violent squeeze higher in Nasdaq 100 toward 20,100 if Fed Chairman Warsh strikes a less hawkish tone than feared.

  • Dow Squeezes to Records on Geopolitical Relief – Tuesday, 16 June

    Where we are: The Dow Jones Industrial Average is consolidating its historic breakout in early London trading, holding firm after Monday’s 350-point surge to fresh record highs. US30 futures are hovering just below yesterday’s closing peak, trading within a tight 120-point overnight range as the market pauses for breath. With European cash indexes posting modest gains, the blue-chip index sits poised to extend its four-day winning streak at the New York open. This consolidation above key structural resistance signals robust underlying demand as shorts are forced to cover.

    What’s driving it: The primary catalyst driving Wall Street’s record run is a rapid recalibration of US inflation expectations ahead of tomorrow’s critical Federal Reserve meeting. US Treasury yields have stabilized, with the 10-year yield resting at 4.48% and the 2-year at 4.09%, which has dramatically eased the discount-rate pressure on cyclical and industrial blue chips. While the Fed is widely expected to hold rates steady, the market is aggressively front-running a softer pro-inflationary outlook following the landmark US-Iran energy agreement to reopen the Strait of Hormuz. This geopolitical de-escalation acts as a powerful domestic tailwind, overriding a minor 1.0bp tick-up in 10-year real yields to 2.17% and driving the VIX down 1.48 points to 16.2 as equity risk premiums compress.

    • The retreat in US 10-year Treasury yields to 4.48% is breathing life back into rate-sensitive Dow giants, ahead of Chairman Warsh’s highly anticipated first meeting tomorrow where monetary framework overhauls are on the table.
    • The impending US-Iran agreement, set to be signed this Friday, has defused intermediate inflation fears by guaranteeing the restoration of Persian Gulf energy exports, allowing the market to look past WTI crude at $95 per barrel.
    • Speculator positioning in Dow futures remains net short at -2,539 contracts (56th percentile of the 52-week range), leaving a significant pool of fuel for a short-covering squeeze as the index hits nominal records.

    NY session focus: The immediate focus for the New York session centers on the upcoming 08:30 ET data releases, where any validation of cooling domestic demand will further fuel this record-breaking rally. Key levels to watch on the US30 are yesterday’s record high of 40,350, which stands as immediate resistance, while structural support has migrated up to the 39,900 handle. The trade that is working is long cyclicals and value-oriented industrials, which are prime beneficiaries of the easing energy crisis, while the trade at risk is chasing the overextended mega-cap tech stocks that are currently seeing capital reallocated away from them. The ultimate pain trade for the desk is a rapid extension of the Dow towards 40,500, forcing the remaining net-short spec positions to capitulate before tomorrow’s FOMC decision.

  • NY Session Tactical Brief – Tuesday, 16 June

    Regime: Risk-on dominance shapes the global session as the US-Iran peace deal suppresses the VIX by 8.4% to 16.2 and softens the DXY to 99.70, overriding a marginal backup in US 10-year yields to 4.48%.

    Today’s market themes:

    • Theme 1: Geopolitical de-escalation triggers massive energy liquidation as Brent collapses below $80.
    • Theme 2: Monetary policy divergence intensifies as BoJ’s underwhelming 25bp hike fails to rescue JPY.
    • Theme 3: Global equity records as DAX clears 25,000 on regional disinflation optimism.

    The setup: The historic US-Iran peace deal has dismantled the geopolitical risk premium in crude, sending WTI crashing 4% to $77.60. This massive risk-on impulse is driving EUR/USD to 1.1600 and Cable to 1.3425, exposing crowded USD longs (81st percentile) to a deeper squeeze. We lean long EUR/USD targeting 1.1680 and short USD/JPY on any return to 160.00 as intervention risks loom large despite the BoJ’s underwhelming 25bp rate hike.

    Watch list (native time per event):

    • 12:19 JST: JPY BOJ Policy Rate (Actual: 1.00% vs 1.00% forecast, 0.75% prior)
    • 14:30 AEST: AUD RBA Cash Rate (Actual: 4.35% vs 4.35% forecast, 4.35% prior)
    • 15:30 JST: JPY BOJ Press Conference (Governor Ueda’s policy outlook and JGB purchase guidance)

    Bias by asset:

    • DXY:
      • Direction: Bearish
      • Domestic (US): Fed hawkishness is challenged by soft PCE expectations; US yields steady.
      • Cross: Geopolitical risk-on from US-Iran peace deal sparks flows into majors.
      • Levels: Support 99.50 / Resistance 100.20
    • EUR/USD:
      • Direction: Bullish
      • Domestic (EU): ECB’s Lane maintains constructive economic path; Eurozone CPI stable at 2.0%.
      • Cross: Softening DXY and narrowing yield spreads lift spot to 1.1600.
      • Levels: Support 1.1540 / Resistance 1.1650
    • GBP/USD (Cable):
      • Direction: Bullish
      • Domestic (UK): BoE 4.50% Bank Rate remains highly restrictive; Gilt yields hold elevated.
      • Cross: Heavy DXY liquidation and global risk-on flow propel spot through 1.3400.
      • Levels: Support 1.3360 / Resistance 1.3450
    • USD/JPY:
      • Direction: Bearish
      • Domestic (JP): BoJ hiked 25bp to 1.00%; MoF intervention threat intensifies above 160.00.
      • Cross: High US 10Y yields keep JPY under pressure despite risk-on.
      • Levels: Support 158.80 / Resistance 160.20
    • USD/CAD (Loonie):
      • Direction: Bearish
      • Domestic (CA): Domestic CPI keeps BoC on hold; oil collapse caps Loonie gains.
      • Cross: Broad DXY selling pressure pushes USD/CAD to test the 1.3910 handle.
      • Levels: Support 1.3880 / Resistance 1.3950
    • AUD/USD (Aussie):
      • Direction: Bearish
      • Domestic (AU): RBA paused at 4.35% today, halting its previous three-meeting hiking cycle.
      • Cross: DXY weakness limits downside, but falling copper prices anchor the Aussie.
      • Levels: Support 0.7020 / Resistance 0.7100
    • NZD/USD (Kiwi):
      • Direction: Bearish
      • Domestic (NZ): RBNZ retains strong dovish easing bias; weak domestic activity weighs heavily.
      • Cross: Soft DXY provides weak support as Kiwi remains the G10 underperformer.
      • Levels: Support 0.5780 / Resistance 0.5850
    • USD/CHF (Swissy):
      • Direction: Bearish
      • Domestic (CH): May producer prices fell 0.4%, cementing SNB’s entrenched disinflationary path.
      • Cross: Soft DXY and safe-haven liquidation drive CHF weakness near 0.7900.
      • Levels: Support 0.7850 / Resistance 0.7950
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP Bearish / EUR/JPY Bullish / GBP/JPY Bullish
      • Domestic: BoE’s 4.50% yield advantage dominates over ECB easing and glacial BoJ normalisation.
      • Cross: Softening DXY and global risk-on flows amplify cross-rate volatility.
      • Levels: EUR/GBP support 0.8400 / EUR/JPY resistance 186.00 / GBP/JPY support 213.50
    • XAU (Gold):
      • Direction: Bullish
      • Domestic (asset-specific): Real yields at 2.17% provide mild headwinds offset by solid physical buying.
      • Cross: DXY weakness below 100.00 fuels gold’s extension above $4,300.
      • Levels: Support $4,280 / Resistance $4,350
    • XAG (Silver):
      • Direction: Bullish
      • Domestic (asset-specific): Industrial demand expectations improve; Gold-Silver ratio remains elevated around 85.
      • Cross: DXY depreciation and positive global risk tone support industrial metals.
      • Levels: Support $29.50 / Resistance $31.20
    • WTI / Brent:
      • Direction: Bearish
      • Domestic (asset-specific): Expected return of Hormuz flows triggers massive OPEC supply hedge liquidation.
      • Cross: Sharp DXY drop fails to offset massive geopolitical risk premium wipeout.
      • Levels: Brent support $78.50 / WTI support $76.80
    • Copper:
      • Direction: Bearish
      • Domestic (asset-specific): China growth concerns mount as LME stocks show steady inventory build.
      • Cross: DXY weakness limits downside, but global growth proxy faces squeeze risk.
      • Levels: Support $4.40 / Resistance $4.65
    • SPX:
      • Direction: Bullish
      • Domestic (US): Corporate earnings remain highly robust; Fed rate cut expectations remain stable.
      • Cross: VIX collapse to 16.2 fuels systemic cash inflows ahead of NY.
      • Levels: Futures 5,445 / cash resistance 5,480
    • NDX:
      • Direction: Bullish
      • Domestic (US): Tech digestion continues; massive SpaceX AI valuation expansion boosts Nasdaq futures.
      • Cross: Rising US real yields to 2.17% pose mild duration valuation headwinds.
      • Levels: Support 19,450 / Resistance 19,620
    • US30 (Dow):
      • Direction: Bullish
      • Domestic (US): Industrial recovery and cyclical financial earnings underpin Dow near record highs.
      • Cross: US 10Y yield stability at 4.48% prevents growth-to-value sector rotation.
      • Levels: Support 40,100 / Resistance 40,350
    • UK100 (FTSE):
      • Direction: Neutral
      • Domestic (UK): Strong Sterling above 1.3400 caps exporter earnings; heavy energy weighting drags.
      • Cross: Global risk-on offsets commodity weakness to support UK cash index.
      • Levels: Support 8,120 / Resistance 8,220
    • DAX:
      • Direction: Bullish
      • Domestic (DE): Regional inflation settling at 2.0% fuels conviction in constructive German outlook.
      • Cross: Weak DXY and global risk-on appetite fuel European cash equity inflows.
      • Levels: Support 24,800 / Resistance 25,200
    • Nikkei:
      • Direction: Bullish
      • Domestic (JP): Index shrugged off BoJ rate hike to close at record 69,404.
      • Cross: Global tech resilience and weak JPY export dynamics bolster corporate sentiment.
      • Levels: Support 68,500 / Resistance 69,800
    • BTC:
      • Direction: Bullish
      • Domestic (asset-specific): High positive funding rates and steady ETF inflows support consolidation at $68,400.
      • Cross: DXY weakness and Nasdaq risk-on momentum offset rising global real yields.
      • Levels: Support $67,500 / Resistance $69,500

    Positioning watch: Speculator positioning shows extreme crowding in USD longs (81st percentile), copper longs (92nd percentile), and Bitcoin longs (98th percentile), leaving them vulnerable to sharp liquidation. Conversely, deep net-short positioning in the Japanese Yen (0 percentile) and S&P 500 (6th percentile) presents massive squeeze risks on any positive macro surprises.

    The pain trade: The ultimate pain trade is a violent short squeeze in JPY that forces USD/JPY rapidly back toward 155.00, triggered by physical MoF intervention or hawkish Ueda rhetoric at the press conference this afternoon.

  • DXY Braces for Warsh Debut as Easing Bias Fades – Tuesday, 16 June

    Where we are: The Dollar Index (DXY) is steadying around 99.70 in early London trading, paring some of yesterday’s losses after the US-Iran peace deal announcement triggered a risk-on wave. We are holding just above key near-term support at 99.50, keeping the index within striking distance of last week’s highs. Meanwhile, Treasury yields are creeping up, with the 2-year sitting at 4.09% and the 10-year at 4.48%, reflecting a market that is refusing to price in any imminent easing ahead of tomorrow’s landmark FOMC decision.

    What’s driving it: The domestic focus is entirely locked on the Federal Reserve’s upcoming policy meeting, where newly minted Chair Kevin Warsh is expected to maintain a patient hold in the 4.25% to 4.50% target range. Domestic interest rate expectations are shifting hawkishly, with the street increasingly betting that the FOMC will officially excise its easing bias from the policy statement. This policy shift is reinforced by sticky core inflationary pressures that have kept the US 10-year real yield elevated at 2.17%, a development that continues to act as a structural headwind for non-yielding assets. US asset prices are also adapting to broader global developments, including the Bank of Japan hiking its policy rate to a 31-year high of 1.00% to combat geopolitical inflation, and Monday’s surprise US-Iran peace agreement which temporarily took the geopolitical premium out of crude oil.

    • The Federal Reserve’s policy bias is poised for a hawkish recalibration under Chair Warsh, with market consensus shifting toward a complete removal of the easing bias from tomorrow’s statement.
    • US real yields remain highly supportive of the greenback, with the 10-year TIPS yield holding firm at 2.17% and the 10-year breakeven inflation rate sitting at 2.32%.
    • Speculative positioning in the dollar has reached a crowded long profile at the 81st percentile of its 52-week range, creating a substantial squeeze risk if tomorrow’s FOMC fails to validate the hawkish shift.

    NY session focus: As the New York session opens, we expect tight range-bound trading ahead of tomorrow’s 14:00 ET FOMC decision, with immediate resistance for DXY at 100.20 and critical support at 99.50. The trade that continues to work is selling rallies in currencies with active dovish divergence, while the short-DXY momentum trade sparked by the Iran peace deal looks increasingly at risk of stalling near these yield levels. A failure of the Fed to sound sufficiently hawkish tomorrow is the primary risk to the current long-USD consensus. The pain trade is a swift unwind of crowded dollar longs back down toward the 98.80 support zone if Warsh keeps the door open to rate cuts later this year.

  • SPX Squeeze Builds as Geopolitical Risk Fades – Tuesday, 16 June

    Where we are: S&P 500 futures are grinding higher ahead of the New York open, consolidating near 5,445 after extending a three-session rally. This follows a strong showing on Monday where the Dow jumped 350 points to record highs, though the Nasdaq 100 dragged on megacap tech consolidation. Overnight, cash index futures maintained a tight constructive range, consolidating yesterday’s gains while European bourses traded mixed to slightly higher. We are currently sitting just above yesterday’s NY close, coiled and ready to break out of the recent range.

    What’s driving it: US Treasury yields are edging up, with the 10-year at 4.48% and real TIPS yields rising to 2.17%, reflecting a bond market that is bracing for tomorrow’s crucial Federal Reserve decision under the new leadership of Chairman Warsh. Despite this yield headwind, equity sentiment remains highly resilient, supported by the historic de-escalation of the US-Iran conflict and the impending reopening of the Strait of Hormuz. This geopolitical “peace dividend” is driving a healthy rotational bid out of tech heavyweights like Microsoft and Alphabet and into broader cyclical value. Crucially, the aggregate market direction is highly asymmetric due to heavily offsides market positioning.

    • The US 2-year yield has climbed to 4.09% (+4.0bp) and the 10-year to 4.48% (+3.0bp) as the market anticipates a hawkish hold from the Fed tomorrow, where newly appointed Chairman Warsh may signal an overhaul of the central bank’s monetary framework.
    • The pending US-Iran peace deal is driving a rotation out of cash-rich megacaps and into cyclicals; even with WTI crude hovering at 95, the reopening of the Strait of Hormuz removes a massive tail-risk premium for the broader market.
    • CFTC speculator positioning is at an extreme 6th percentile of its 52-week range, with net non-commercial accounts heavily net short at -194,554 contracts (-8.7% of open interest), signaling a market coiling for a massive short squeeze on any positive macro or geopolitical developments.

    NY session focus: All eyes are on the pre-market US macro data printing at 08:30 ET, which will set the tactical direction for the NY open. Key levels to watch on the ES contract are the overnight high near 5,465, with a clean break exposing psychological resistance at 5,500, while support holds firm at yesterday’s pivot of 5,410. The tactical trade that is working is long value and equal-weighted S&P plays, while the concentrated tech long trade is under pressure as megacaps digest recent gains. The ultimate pain trade is a violent upward squeeze that forces massive short-covering from offsides macro funds.

  • NY Session Tactical Brief – Tuesday, 16 June

    Regime: Risk-on but with a clear cyclical tilt, anchored by the VIX sliding 8.37% to 16.2 and the DXY breaking below 100 to trade at 99.70 as real yields hold near 2.17%.

    Today’s market themes:

    • Theme 1: Central bank divergence as BoJ’s surprise 25bp hike to 1.00% contrasts with the RBA’s rate hold at 4.35%.
    • Theme 2: Energy supply shock as Brent plummets below $80/bbl on imminent US-Iran interim deal supply expectations.
    • Theme 3: Eurozone disinflation milestone as HICP hits 2.0%, propelling the DAX past 25,000 before ECB’s Lane speaks.

    The setup: The overnight 25bp BoJ rate hike to 1.00% and the RBA’s hawkish-disappointing hold at 4.35% have created a stark policy divergence that is dominating G10 FX. This occurs as Brent crude plunges below the critical $80.00/bbl handle, heavily dampening global inflation expectations and supporting European equities. We are actively positioned long DAX through the 25,000 milestone ahead of ECB Chief Economist Lane’s speech at 13:10 BST, and we remain sellers of USD/JPY rallies near the pivotal 160.00 handle on heightened intervention risk.

    Watch list (native time per event):

    • 15:30 JST: JPY: BOJ Press Conference (Governor Ueda speaking post-25bp rate hike)
    • 15:30 AEST: AUD: RBA Press Conference (Governor Bullock speaking post-hold at 4.35%)
    • 13:10 BST: EUR: ECB Chief Economist Philip Lane Speech (addressing wage trackers and inflation convergence)

    Bias by asset:

    • DXY:
      • Direction: Bearish bias
      • Domestic (US): Yields ticking higher with 10Y at 4.48% amid resilient economic activity.
      • Cross: Heavy global risk-on flows and surging Cable drag DXY below 99.70.
      • Levels: Support 99.50 / Resistance 100.20
    • EUR/USD:
      • Direction: Bullish bias
      • Domestic (EU): HICP convergence to the 2.0% target supports a steady, controlled ECB easing cycle.
      • Cross: Plummeting DXY and softening US pre-market yields propel EUR/USD toward $1.1600.
      • Levels: Support 1.1520 / Resistance 1.1650
    • GBP/USD (Cable):
      • Direction: Bullish bias
      • Domestic (UK): High relative BoE Bank Rate at 4.50% provides solid yield support.
      • Cross: DXY weakness and crowded short positioning trigger a squeeze through 1.3400.
      • Levels: Support 1.3350 / Resistance 1.3480
    • USD/JPY:
      • Direction: Bearish bias
      • Domestic (JP): BoJ hiked rates 25bp to 1.00%, steepening JGB curve and driving repatriation.
      • Cross: Spread compression vs US 10Y at 4.48% and MoF intervention fears cap upside.
      • Levels: Support 158.50 / Resistance 160.00
    • USD/CAD (Loonie):
      • Direction: Bullish bias
      • Domestic (CA): Falling crude prices weaken the petro-currency link despite steady BoC policy outlook.
      • Cross: Underperforming Loonie keeps USD/CAD pinned near 1.3910 despite soft DXY.
      • Levels: Support 1.3850 / Resistance 1.3950
    • AUD/USD (Aussie):
      • Direction: Bearish bias
      • Domestic (AU): RBA held rates at 4.35%, disappointing hawks looking for further tightening steps.
      • Cross: Falling copper prices and weak Chinese demand offsets broader DXY soft patch.
      • Levels: Support 0.7000 / Resistance 0.7120
    • NZD/USD (Kiwi):
      • Direction: Bearish bias
      • Domestic (NZ): RBNZ entrenched easing bias after April’s cut to 3.50% keeps Kiwi heavy.
      • Cross: Weak risk appetite in commodity currencies keeps Kiwi pinned near 0.5810.
      • Levels: Support 0.5780 / Resistance 0.5870
    • USD/CHF (Swissy):
      • Direction: Bearish bias
      • Domestic (CH): Deflationary momentum persists as Swiss producer prices fell 0.4% in May.
      • Cross: Strong safe-haven demand drives Swissy to 0.7900 against a weakening dollar.
      • Levels: Support 0.7850 / Resistance 0.7960
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP Bearish, EUR/JPY Bearish, GBP/JPY Bearish
      • Domestic: ECB deposit rate at 2.50% sits 200bp below BoE’s 4.50% Bank Rate.
      • Cross: BoJ rate hike and cooling UK inflation chip away at JPY cross premiums.
      • Levels: EUR/GBP Support 0.8400 / GBP/JPY Resistance 215.00
    • XAU (Gold):
      • Direction: Neutral bias
      • Domestic (asset-specific): Physical central bank gold purchases and solid physical demand provide strong baseline support.
      • Cross: Safe-haven flows and soft DXY keep gold steady above $4,300/oz.
      • Levels: Support $4,280 / Resistance $4,350
    • XAG (Silver):
      • Direction: Bearish bias
      • Domestic (asset-specific): Declining industrial demand and rising gold-silver ratio pressure prices downward.
      • Cross: Broader commodity liquidations offset support from a weaker US dollar.
      • Levels: Support $28.50 / Resistance $30.20
    • WTI / Brent:
      • Direction: Bearish bias
      • Domestic (asset-specific): Expected Iranian barrels from potential interim deal set to significantly increase global supply.
      • Cross: Plunging prices below $80 reflect global growth concerns and index liquidation.
      • Levels: Brent Support $77.50 / Resistance $81.50
    • Copper:
      • Direction: Bearish bias
      • Domestic (asset-specific): Soft China data adds to acute downside pressure and rising warehouse stocks.
      • Cross: Crowded long positioning (92%ile) risks massive liquidations on weak global growth.
      • Levels: Support $4.30 / Resistance $4.60
    • SPX:
      • Direction: Bullish bias
      • Domestic (US): Goldman traders see room for rally to broaden beyond mega-cap tech winners.
      • Cross: S&P 500 futures hold gains near highs as VIX slides to 16.2.
      • Levels: Futures 5,420 / Cash Support 5,380 / Resistance 5,450
    • NDX:
      • Direction: Bearish bias
      • Domestic (US): Tech heavyweights trim recent gains as real yields rise to 2.17%.
      • Cross: Futures trade softer at 19,820 as traders rotate out of crowded tech.
      • Levels: Support 19,700 / Resistance 20,000
    • US30 (Dow):
      • Direction: Bullish bias
      • Domestic (US): Industrial and cyclical stocks surge as Dow touches historic highs of 40,150.
      • Cross: Lower oil prices boost consumer discretionary outlook and broader market sentiment.
      • Levels: Support 39,800 / Resistance 40,300
    • UK100 (FTSE):
      • Direction: Bullish bias
      • Domestic (UK): UK Burnham political risk weighs slightly but market shrugs it off today.
      • Cross: Rising global risk appetite and weak energy stocks balance FTSE at 8,180.
      • Levels: Support 8,120 / Resistance 8,240
    • DAX:
      • Direction: Bullish bias
      • Domestic (DE): DAX clears historic 25,000 milestone on German inflation hitting 2.0% target.
      • Cross: Lower global energy costs boost major German industrial and manufacturing exporters.
      • Levels: Support 24,850 / Resistance 25,150
    • Nikkei:
      • Direction: Bullish bias
      • Domestic (JP): Nikkei scalped 70,000 intraday, digesting BoJ’s historic rate hike to 1.00%.
      • Cross: US pre-market tech weakness is offset by strong local financial sector bid.
      • Levels: Support 68,500 / Resistance 70,200
    • BTC:
      • Direction: Bullish bias
      • Domestic (asset-specific): Strong institutional ETF inflows support spot prices at two-week highs.
      • Cross: Crowded speculative longs (98%ile) cap immediate upside near $69,200 range top.
      • Levels: Support $67,500 / Resistance $70,000

    Positioning watch: Consensus positioning is dangerously stretched, with short JPY sitting at the absolute 0%ile and S&P 500 net shorts at the 6%ile, exposing both to violent short-squeeze cover rallies on hawkish BoJ rhetoric or supportive macro data. Conversely, crowded long positioning in BTC (98%ile) and Copper (92%ile) presents substantial unwind risks if the broader risk-on regime faces any sudden growth disappointments.

    The pain trade: The pain trade today is a sharp recovery in the US dollar accompanied by a severe sell-off in European equities, triggered if ECB Chief Economist Philip Lane unexpectedly strikes a hawkish tone on wage trackers or if US pre-market yields spike further.

  • Greenback Squeeze Risk Grows Ahead of Quieter Fed – Tuesday, 16 June

    Where we are: The dollar index (DXY) is trading around the 99.70 level ahead of the New York open, consolidating after yesterday’s broad-based selloff. The overnight range remained tightly bound between 99.55 and 99.85 as Asian and European desks sidelined themselves ahead of fresh US catalysts. This leaves the greenback sitting just soft of its previous New York close, while the broader USD index remains heavy near the 119.50 mark. Key technical support is clustered around the 99.40 swing low, while the 2-year US yield is steady at 4.09% and the 10-year yield consolidates at 4.48%.

    What’s driving it: The Federal Reserve’s patient hold at 4.25-4.50% is facing a narrative shift as the market prepares for a quieter, less-vocal central bank under the incoming transition to Kevin Warsh. US rate expectations have cooled alongside a drop in energy-driven inflation risks following the US-Iran peace agreement, which has capped the recent hawkish impulse in Treasury yields. Real yields are holding at 2.17% on the 10-year TIPS, acting as a structural headwind for non-yielding assets but failing to lift the currency due to declining 10-year breakeven inflation of 2.32%. With the next policy decision looming, the market is quickly pricing out the tail-risk of further hikes as the domestic macro picture shows signs of moderating cost pressures.

    • US Treasury yields are showing signs of topping, with the 2-year yield locked at 4.09% and the 2s10s curve steady at 0.4% as traders reassess the Fed’s dot plot path of two cuts in 2026.
    • WTI Crude trading at $95.00 a barrel is beginning to price in the reopening of the Strait of Hormuz, which should continue to damp US breakeven inflation from its current 2.32% print.
    • CFTC positioning shows speculator longs are highly crowded at the 81st percentile of their 52-week range (+1,384 contracts), creating a severe squeeze risk if upcoming US data prints soft.

    NY session focus: All eyes are on the upcoming 08:30 ET housing sector data, where any signs of cooling in US-home construction will amplify pressure on the currency. We are watching the 99.50 support level closely; a clean break on a soft print opens a direct path to the 99.10 zone. The trade that is working is fading DXY rallies into the New York open, while the long-dollar carry trade is heavily at risk as US real yields plateau. The pain trade for the desk is a sharp downside miss in the 08:30 ET release that triggers a cascading liquidation of the market’s crowded net-long positions.

  • SPX Squeeze Risks Mount Ahead of Fed Decision – Tuesday, 16 June

    Where we are: S&P 500 futures are hovering in tight pre-market ranges, holding onto the bulk of their three-session rally as London handoff begins. The index is consolidating yesterday’s gains, with the immediate ceiling at 5,450 capping the overnight session while solid support remains anchored at the 5,400 breakout level. Cash is set to open fractionally higher, building on the late-day strength that pushed the Dow to record highs while tech heavyweights showed signs of digestion.

    What’s driving it: US Treasury yields are consolidating their recent gains, with the 10-year yield ticking up to 4.48% and the 2-year at 4.09% as the market positions for the FOMC decision tomorrow. Traders are braced for Chairman Warsh’s debut meeting, where a rate hold is fully priced but his hawkish appetite for monetary framework overhauls could inject volatility. This domestic policy uncertainty is cushioned by a sudden geopolitical peace dividend, as the US-Iran agreement to reopen the Strait of Hormuz has softened medium-term pro-inflationary energy risks. Equity sentiment is further supported by a compression in the VIX down to 16.2, offset only by selective profit-taking in mega-cap tech as capital rotates into broader cash-heavy sectors.

    • US 10-year real yields (TIPS) creeping up to 2.17% alongside a minor expansion in the 10-year breakeven to 2.32%, indicating that while nominal yields consolidated, the underlying real rate environment remains a persistent hurdle for high-multiple growth equities.
    • SpaceX surging 8% pre-market (up 40% since its Friday IPO) on news of its $60 billion acquisition of Cursor, driving an intense sector rotation out of traditional mega-caps like Microsoft and Alphabet.
    • Extreme speculator positioning in S&P 500 contracts, with net non-commercial positions languishing in the 6th percentile at -194,554 contracts (-8.7% of open interest), setting up an explosive short-squeeze risk on any dovish or growth-friendly surprise.

    NY session focus: All eyes are on the upcoming US macro prints at 08:30 ET, which will set the directional tone ahead of tomorrow’s critical FOMC decision. Watch the 5,465 level on the upside; a clean break there triggers structural buying from the highly crowded short base. The trade that is working is long value and cyclical pockets of the Dow, while the long mega-cap tech trade is at risk of further distribution as yields remain sticky. The ultimate pain trade is a sharp upward squeeze through 5,480 that forces systematic macro funds to rapidly cover their deeply underwater short books.

  • Nasdaq Squeeze Risk Intensifies Ahead of Fed Decision – Tuesday, 16 June

    Where we are: Nasdaq 100 futures are consolidating lower ahead of the New York bell, trading around the 19,520 level as mega-cap tech digestion offsets broader index resilience. Overnight trade established a tight range between 19,460 and 19,580, leaving the index just below yesterday’s cash close. This mild softness follows a three-session rally, with the index holding comfortably above its 50-day moving average but facing technical resistance at the 19,650 swing high.

    What’s driving it: The primary driver is the pre-FOMC positioning pivot as Treasury yields firm, with the US 2-year yield climbing 4.0 basis points to 4.09% and the 10-year yield up 3.0 basis points to 4.48%. This upward yield pressure is squeezing tech valuations ahead of tomorrow’s crucial rate decision, where newly appointed Chairman Warsh is expected to push for monetary framework overhauls. This rate headwind is clashing with a massive corporate catalyst as SpaceX’s $60 billion Cursor acquisition triggers sector-wide reallocation, pulling capital out of established heavyweights like Microsoft, Meta, and Alphabet. While the broader market finds support in the easing of energy-driven inflation fears after the US-Iran deal to reopen the Strait of Hormuz, Nasdaq-specific liquidity is taking a breather.

    • US 10-year real yields rising to 2.17% (+1.0bp d/d), erecting a structural valuation headwind for long-duration growth assets.
    • The massive $60 billion Cursor acquisition by SpaceX—which has surged 8% today and 40% since its Friday IPO—driving intraday capital rotation away from mega-caps.
    • CFTC speculator positioning sitting at a highly crowded 10th percentile (-1,349 net contracts), exposing the market to a violent short-squeeze on any positive surprise.

    NY session focus: For the New York session, the immediate focus is the US data print at 08:30 ET to see if macro pressures are cooling ahead of tomorrow’s Fed policy decision. A break below the overnight low of 19,460 exposes the key 19,300 support zone, while a reclamation of 19,580 shifts the intraday bias back to the bulls. The high-conviction trade is playing range expansion via long volatility, as a VIX hovering at 16.2 appears mispriced given tomorrow’s policy overhang, while holding unhedged long mega-cap tech exposures remains the primary risk. The pain trade is a violent squeeze through 19,650 that forces under-allocated real money and crowded short speculators to chase the index higher.

  • Dow Extends Record Run on Geopolitical Relief – Tuesday, 16 June

    Where we are: Dow Jones futures are consolidating near record highs this morning, trading tight around the 40,220 mark ahead of the New York open. This follows Monday’s explosive 350-point cash rally to fresh all-time closing records, driven by a dramatic de-escalation of tensions in the Persian Gulf. The overnight session established a narrow, supportive range of 40,180 to 40,260, comfortably holding above the critical breakout support level at 39,900. We are seeing highly constructive price action as the index digests these multi-day gains, setting a firm launchpad for the cash open.

    What’s driving it: US equity allocation is being heavily reshaped by domestic monetary policy expectations ahead of tomorrow’s Federal Reserve decision, where Chairman Warsh is widely tipped to deliver a rate hold while simultaneously pushing for a more hawkish overhaul of the central bank’s policy framework. US equity investors are actively rotating out of high-multiple technology giants and into defensive blue chips as the US 10-year real yield pushes to 2.17%, creating a stark valuation headwind for the Nasdaq while favoring the Dow’s industrial-heavy mix. The domestic macro backdrop is also absorbing the deflationary impulse of the projected US-Iran Persian Gulf energy deal, which has cooled broader commodity-led inflation expectations as WTI crude holds at $95. This combination of structural policy hawkishness and easing geopolitical tail risk is uniquely suited to the Dow’s cyclical composition.

    • Federal Reserve policy overhang remains the central focus, with tomorrow’s rate decision expected to yield a hold but introduce a hawkish framework shift under Chairman Warsh.
    • Systemic risk pricing has collapsed as the VIX fell 1.48 points to 16.2, signaling clean slate positioning as traders unwind geopolitical hedges ahead of Friday’s formal treaty signing.
    • Speculator positioning reveals a classic under-owned rally, with CFTC net non-commercial positions for the Dow remaining in modest net-short territory at -2,539 contracts (56th percentile), leaving substantial room for chasing behavior on any break higher.

    NY session focus: For the upcoming New York session, all eyes are on the US macro data dump at 08:30 ET, which will dictate whether the Dow can break past its immediate intraday ceiling at 40,300. A soft print will accelerate the value rotation, clearing the path toward 40,500, whereas a hot inflation or activity print risks dragging the index back to test the 39,900 breakout zone. The trade that is working is the long Dow / short Nasdaq relative value play, while chasing late tech momentum on this leg remains highly at risk. The ultimate pain trade is a violent short-squeeze above 40,300 that forces under-allocated macro funds to chase the Dow into uncharted territory.

  • Crowded NDX Shorts Vulnerable to Fed Squeeze – Tuesday, 16 June

    Where we are: Nasdaq 100 futures (NQ) are trading softer around the 19,820 mark ahead of the New York open, underperforming the broader cash market after tech heavyweights trimmed recent gains. The overnight range has been relatively tight, capped at 19,910, as traders digest the geopolitical de-escalation in the Middle East and position for tomorrow’s crucial FOMC meeting. This consolidation leaves NQ sitting just below yesterday’s North American cash close, hovering near its 20-day moving average. A clean break below 19,750 would open the door to a deeper retracement, while bulls look to reclaim 19,950 to target psychological resistance at 20,000.

    What’s driving it: The primary driver is the pre-FOMC positioning ahead of Chairman Warsh’s debut meeting tomorrow, where the market anticipates a rate hold but is highly sensitive to any rhetoric surrounding a monetary framework overhaul. This policy overhang is keeping US Treasury yields elevated, with the US 10-year yield hovering at 4.48% and the US 2-year yield at 4.09%, which naturally acts as a valuation drag on high-duration tech. Additionally, the broader rotation away from mega-cap tech into cyclical sectors is accelerating after a US-Iran deal softened pro-inflationary concerns, even as the SpaceX acquisition of Cursor for $60 billion provides localized M&A support.

    • US 10-year real yields (TIPS) rising to 2.17% (+1.0bp d/d), reinforcing a high-for-longer hurdle rate that pressures high-multiple growth stocks.
    • Mega-cap tech leadership is fracturing, with Microsoft, Meta, and Alphabet trading lower as capital rotates out of cash-rich tech and into value segments on the back of the Strait of Hormuz reopening.
    • CFTC Nasdaq 100 net non-commercial positioning is in the 10th percentile of its 52-week range at -1,349 contracts, representing a crowded short that poses extreme squeeze risk on any dovish Fed surprise or positive data print.

    NY session focus: As the New York session gets underway, all eyes are on the 08:30 ET data print to see if soft macro numbers can trigger a reversal in the day’s soft tech tone. We are watching the 19,750 level closely on the downside; a sustained break below here risks a cascade toward 19,580, while a push back above 19,950 invalidates the immediate bearish bias. The trade that is working is long Dow/short NQ relative-value plays, while the trade at risk is chasing the momentum breakout in SpaceX post-IPO. The ultimate pain trade for the street remains a violent short-squeeze back toward 20,100, fueled by the highly congested short positioning.

  • Dow Jones Hits Records as Geopolitical Risks Recede – Tuesday, 16 June

    Where we are: The Dow Jones Industrial Average is consolidating its historic gains in pre-market trade, hovering near record highs at 40,150 after yesterday’s explosive 350-point rally. This four-day winning streak has completely erased the early-month jitters, leaving the blue-chip index well positioned above its 20-day moving average. Overnight ranges were tight as European cash indices digested the news, but the bias remains firmly to the upside as we approach the New York open. We expect the index to find immediate structural support around the previous breakout level of 39,800 if intraday profit-taking emerges.

    What’s driving it: The Federal Reserve’s policy decision tomorrow and the potential for a monetary framework overhaul under Chairman Warsh dominate the domestic macro backdrop, with US 10-year yields holding at 4.48% and the 2-year at 4.09%. This consolidation in yields, paired with a softening US Dollar Broad Index at 119.5073, provides a fertile environment for industrial and cyclical names to lead the broader market. US equity markets are experiencing a powerful internal rotation, as capital flees high-multiple tech giants to fund exposure to Dow cyclicals amidst a collapse in the VIX to 16.2. This rotational bid is amplified by the easing of geopolitical tensions in the Middle East, with the potential Friday signing of the US-Iran deal providing a major tailwind for global risk appetite.

    • US 10-year real yields (TIPS) have ticked up to 2.17%, acting as a headwind for precious metals but validating the robust domestic growth backdrop that supports Dow financials and industrials.
    • A massive rotation is underway out of mega-cap tech and into blue chips, evidenced by Nasdaq 100 underperformance while SpaceX’s 8% gain after its $60 billion Cursor acquisition fuels broader industrial sentiment.
    • CFTC speculator positioning shows non-commercial accounts remain modestly net short at -2,539 contracts (56th percentile), revealing an under-allocated street that must chase this breakout to record highs.

    NY session focus: Our focus for the New York session centers on the 08:30 ET macro data release, which will dictate whether bond yields resume their upward march or solidify the current goldilocks bid. Tactically, buying any intraday dip toward the 39,800 structural support level remains the high-conviction play, while a clean break above yesterday’s record high at 40,250 opens the door for a run toward 40,500. The long-tech/short-value spread trade is highly at risk today as value-driven cyclical sectors continue to attract defensive inflows. The pain trade for the session is a continued squeeze higher that forces the under-allocated short books to capitulate before tomorrow’s critical FOMC decision.

  • NY Session Tactical Brief – Tuesday, 2 June

    Regime: Mixed: VIX steady at 15.32 but yields are pulling back modestly, capping the DXY at 99.05 amid light risk-off sentiment.

    Today’s market themes:

    • ECB watch: Eurozone inflation data reinforces the case for a June rate hike, setting up a potential hawkish surprise.
    • Oil supply: Geopolitical tensions compete with global demand concerns and US-Iran talks, causing volatility.
    • Positioning squeeze: Crowded short JPY and crowded long BTC may be vulnerable given current data.

    The setup: Eurozone CPI data is key today. The market is pricing in a high probability of an ECB rate cut in June, so an upside surprise could trigger a significant EUR rally against both the USD and GBP. Key risk is a weaker-than-expected print, confirming the dovish expectations and leading to EUR weakness. Watch EUR/USD at 1.1650 and US-DE 10Y spread for confirmation.

    Watch list (native time per event):

    • 11:00 CET EUR Core CPI Flash Estimate y/y (forecast 2.4%, prior 2.2%)
    • 10:00 ET USD JOLTS Job Openings (forecast 6.87M, prior 6.87M)
    • 11:30 AEST AUD GDP q/q (forecast 0.5%, prior 0.8%)

    Bias by asset:

    • DXY:
      • Direction: Neutral
      • Domestic (US): Fed data watch / yield levels
      • Cross: Euro strength / risk sentiment
      • Levels: Support 98.80 / Resistance 99.20
    • EUR/USD:
      • Direction: Bullish
      • Domestic (EU): Inflation data key for ECB path
      • Cross: DXY pullback / US-DE 10Y widening
      • Levels: Support 1.1620 / Resistance 1.1680
    • GBP/USD (Cable):
      • Direction: Neutral
      • Domestic (UK): BoE Bailey speech / Gilt direction
      • Cross: DXY / US-UK 10Y stable
      • Levels: Support 1.3440 / Resistance 1.3500
    • USD/JPY:
      • Direction: Bearish
      • Domestic (JP): Intervention risk / yield curve control
      • Cross: US 10Y stable / risk-off tone
      • Levels: Support 159.50 / Resistance 160.00
    • USD/CAD (Loonie):
      • Direction: Neutral
      • Domestic (CA): WTI under pressure / BoC stance
      • Cross: DXY / US-CA 10Y stable
      • Levels: Support 1.3820 / Resistance 1.3860
    • AUD/USD (Aussie):
      • Direction: Neutral
      • Domestic (AU): GDP and commodity prices in focus
      • Cross: DXY / US-AU 10Y spread
      • Levels: Support 0.7150 / Resistance 0.7200
    • NZD/USD (Kiwi):
      • Direction: Bearish
      • Domestic (NZ): RBNZ easing bias / dairy prices
      • Cross: DXY / risk sentiment
      • Levels: Support 0.5900 / Resistance 0.5950
    • USD/CHF (Swissy):
      • Direction: Neutral
      • Domestic (CH): SNB stance / Swiss data
      • Cross: DXY / risk-off flows
      • Levels: Support 0.7840 / Resistance 0.7880
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP Bullish, EUR/JPY Bullish, GBP/JPY Neutral
      • Domestic: ECB vs BoE/BoJ differentials
      • Cross: DXY / risk sentiment
      • Levels: Watch relative yield spreads
    • XAU (Gold):
      • Direction: Bullish
      • Domestic (asset-specific): Real yields down / CB demand
      • Cross: DXY / risk aversion
      • Levels: Support 4500 / Resistance 4550
    • XAG (Silver):
      • Direction: Bullish
      • Domestic (asset-specific): industrial demand / gold link
      • Cross: DXY / risk sentiment
      • Levels: Support 7500 / Resistance 7700
    • WTI / Brent:
      • Direction: Bearish
      • Domestic (asset-specific): EIA data / OPEC / US-Iran talks
      • Cross: DXY / risk sentiment
      • Levels: Support 90.00 / Resistance 92.00
    • Copper:
      • Direction: Neutral
      • Domestic (asset-specific): China demand outlook
      • Cross: DXY / global growth outlook
      • Levels: Support 660 / Resistance 670
    • SPX:
      • Direction: Neutral
      • Domestic (US): earnings / Fed watch / yields
      • Cross: VIX regime / global risk
      • Levels: Futures support 7580 / cash resistance 7620
    • NDX:
      • Direction: Neutral
      • Domestic (US): earnings / real yields
      • Cross: Rate sensitivity / VIX
      • Levels: Support 30300 / Resistance 30600
    • US30 (Dow):
      • Direction: Neutral
      • Domestic (US): earnings / cyclical tone
      • Cross: Bond-yield reaction
      • Levels: Support 50700 / Resistance 51000
    • UK100 (FTSE):
      • Direction: Bullish
      • Domestic (UK): Sterling direction / Gilt yields
      • Cross: Global risk / US tone
      • Levels: Support 23200 / Resistance 23400
    • DAX:
      • Direction: Neutral
      • Domestic (DE): Bund yields / data watch
      • Cross: US tech / DXY
      • Levels: Support 25100 / Resistance 25300
    • Nikkei:
      • Direction: Neutral
      • Domestic (JP): JPY level / JGB
      • Cross: US tech / risk sentiment
      • Levels: Support 65500 / Resistance 66700
    • BTC:
      • Direction: Bearish
      • Domestic (asset-specific): funding rates / ETF flows
      • Cross: DXY / risk sentiment / Nasdaq correlation
      • Levels: Support 68000 / Resistance 70000

    Positioning watch: JPY remains heavily shorted (0th percentile), increasing squeeze risk if the BoJ signals policy normalization. BTC is also a crowded long (94th percentile), leaving it vulnerable to profit-taking on any risk-off move.

    The pain trade: A surprise hawkish signal from the ECB, combined with soft US data, would spark a EUR rally and punish USD longs, while forcing JPY shorts to cover aggressively.

  • DXY Drifts Lower as Fed Bets Remain Central – Tuesday, 2 June

    Where we are: The DXY currently sits at 99.05, down -0.08% on the day, trading in a tight 99.00-99.18 range. The index is softer compared to yesterday’s close, consolidating recent gains as traders await fresh catalysts. The subdued price action reflects a market in wait-and-see mode ahead of key US data releases later this week.

    What’s driving it: The dollar’s direction remains firmly tethered to expectations for Federal Reserve policy. Despite the Fed’s patient hold and trimmed dot plot signaling only two cuts in 2026, the market is still pricing in around 17 bps of hikes by year-end, suggesting lingering doubts about the Fed’s dovish lean. The medium-impact JOLTS data at 10:00 ET will provide a timely update on labour-market conditions, and will be closely watched. Treasury yields are edging lower (10Y at 4.432%, 2Y at 4.031%), supporting the softer DXY. This comes despite an overall risk-on tone to the trading day, with Asian and European stocks trading higher on the whole.

    • The Fed’s data-dependent stance, explicitly laid out in the last meeting minutes, keeps markets hyper-sensitive to incoming US data.
    • CFTC data shows net non-commercial positions in the USD are +850 contracts, in the 81st percentile for the last 52 weeks, presenting squeeze risk on any dovish surprises.
    • Pimco’s view that Treasury yields are primarily driven by Fed bets and not AI, at least for now, reinforces the importance of monetary policy expectations.

    NY session focus: The focus today is squarely on the 10:00 ET release of JOLTS Job Openings. A print significantly below the 6.87M forecast could spur a further dovish repricing, pressuring the DXY towards 98.80. Conversely, a stronger reading could see the DXY test resistance around 99.20. The trade that’s working is short USD against high-beta currencies, but this is vulnerable to a hawkish surprise. The pain trade is a re-acceleration of US inflation forcing the Fed to turn even more hawkish.