Glossary

Central-bank language or action favoring tighter monetary policy.

Hawkish describes central-bank communication or decisions that lean toward tighter monetary policy — higher rates, reduced asset purchases, or emphasis on inflation risk. It is a classification of the communication itself, not a forecast of what follows.

Central-bank language or action favoring looser monetary policy.

Dovish describes central-bank communication or decisions that lean toward looser monetary policy — lower rates, continued asset purchases, or emphasis on growth or employment risk. It is a classification of the communication itself, not a forecast of what follows.

The gap between a spot price and its related futures price.

Basis is the numerical difference between the spot price of an asset and the price of a futures contract on that same asset. It narrows toward zero as the futures contract approaches expiry (convergence).

The return or cost from holding a position, separate from its price change.

Carry is the income or expense generated by holding a position over time — interest-rate differentials on a currency pair, dividend yield on an equity, or storage cost on a physical commodity. It is distinct from any change in the asset's price.

The extra yield investors require for holding longer-dated debt.

Term premium is the additional yield that investors demand to hold a longer-maturity bond instead of rolling over a series of shorter-maturity ones, compensating for the added uncertainty over a longer horizon.

A bond yield adjusted for expected inflation.

Real yield is a bond's nominal yield minus the market's expected inflation rate over the same period. It reflects the return an investor expects after inflation, rather than the stated coupon rate alone.

A weekly regulatory report on futures market positioning by trader category.

The Commitments of Traders (COT) report is published weekly by a market regulator and breaks down open futures positions by trader category — commercial hedgers, large speculators, and small traders. It is a positioning record, not a price prediction.

The distribution of existing market participants' open positions.

Positioning describes how market participants are currently allocated across long and short exposure in an asset, typically inferred from reports like COT or exchange data. It is a snapshot of existing exposure, not a signal about future price action.

A value's rank relative to its own historical range.

A percentile expresses where a current value sits relative to its own historical distribution — for example, positioning at the 90th percentile means it is higher than 90% of readings in the reference period. It contextualizes a number against its own history.

A futures curve where near-dated contracts are priced above far-dated ones.

Backwardation is a futures-curve shape in which contracts closer to expiry trade at a higher price than contracts further out. It is commonly observed in commodities and can reflect near-term supply tightness.

A futures curve where far-dated contracts are priced above near-dated ones.

Contango is a futures-curve shape in which contracts further from expiry trade at a higher price than contracts closer to expiry. It is the mirror case of backwardation and often reflects storage or financing costs.

An index measuring the US dollar against a fixed basket of currencies.

DXY (the US Dollar Index) measures the US dollar's value against a fixed weighted basket of major currencies, primarily the euro, yen, pound, Canadian dollar, Swedish krona, and Swiss franc. It is a composite gauge, not a single exchange rate.

The shorter-maturity segment of a yield curve.

The front end refers to the shorter-maturity portion of a bond yield curve — typically maturities out to two years — which is most directly influenced by current and expected central-bank policy rates.

A market-wide adjustment in how an asset or risk factor is valued.

Repricing describes a shift in how market participants collectively value an asset or risk factor, typically following new information. It refers to the adjustment process itself, not a specific direction of that adjustment.

The extra return investors require for bearing additional risk.

Risk premium is the additional expected return investors demand for holding a riskier asset instead of a comparatively safe one, compensating them for the added uncertainty.

The price or yield difference between two related instruments.

A spread is the numerical difference between the prices, rates, or yields of two related instruments — for example, between two bonds, two currency quotes, or a bid and an ask. The term describes the gap, not its cause.

A plot of yields across bonds of different maturities from the same issuer.

A yield curve plots the yields of bonds with the same credit quality but different maturities, typically from a single issuer such as a government. Its shape (upward-sloping, flat, or inverted) is a widely referenced descriptive indicator.

An asset class conventionally associated with capital preservation in stress.

Safe haven describes an asset class that has conventionally attracted capital-preservation-oriented flows during periods of broad market stress, based on historical pattern rather than a guarantee of future behavior.

How readily an asset can be traded without moving its price.

Liquidity describes how easily an asset can be bought or sold in size without materially affecting its price. Higher liquidity generally means tighter spreads and more available volume at a given price level.

A prevailing, multi-factor state of market conditions.

A regime is a descriptive label for a prevailing combination of market conditions — such as volatility level, correlation patterns, or policy backdrop — that tends to persist over a stretch of time before shifting to a different combination.

Tracing an asset's move back to a specific causal input.

Attribution is the process of tracing an observed price move back to a specific, identifiable input — such as a data release, policy statement, or news event — rather than describing the move without a stated cause.