Daily Research
US equities rallied as Meta's Muse AI momentum and a Wells Fargo target increase lifted the large-cap technology complex. S&P 500 rose 1.5% to 7,765, Nasdaq Composite 2.3%, Nasdaq 100 2.9% to 30,482, Dow 0.7% to 52,054 and Russell 2000 0.5% to 2,875. Communication Services, Technology and Consumer Discretionary led; Energy, Utilities and Consumer Staples lagged. Intel and AMD joined the advance on expected computing demand. Bitcoin gained 6.8%, Ethereum 4.7% and copper 1.0%. This is a constructive risk-on session, but its technology concentration and geopolitical catalyst leave breadth vulnerable.
WTI November fell 4.3% and Brent November 3.9% as markets looked to the UN General Assembly for US-Iran progress. Trump remained open to meeting President Pezeshkian; Qatar and Pakistan pursued talks and Gulf states called for a new regional approach. Iran, however, attached seven reported conditions, kept Hormuz closed pending the Islamabad terms and denied IRGC diplomatic contact. Washington maintained pressure: Bessent said Iranian airlines would be shut worldwide on 23 September, Greer kept sanctions options open and Vance stressed naval security and normal oil flows. A delayed UKMTO report involving an LPG tanker leaving Hormuz kept maritime risk live. The price move removes immediate premium; it does not verify safe passage or a negotiated settlement.
Tasnim reported a Saudi strike in Taiz killed six civilians and wounded eight. A Houthi leader offered a fair agreement, while other Houthi statements promised retaliation, threatened Egypt, Turkey and Pakistan in a later phase, and accused Saudi Arabia of blocking Yemeni ports and airports. The UK was reported close to helping Saudi forces counter the Houthis. Axios said Trump considered strikes over the weekend but held back; Yemen's President al-Alimi requested US support without receiving a commitment. Macron and Trump discussed the Red Sea without a substantive disclosed outcome. An active channel exists, but there is no durable reduction in risk to Saudi infrastructure, the Red Sea or Bab al-Mandeb.
Satellite-based reporting said Saudi Aramco loaded about 14 million barrels onto seven VLCCs on Sunday, evidence that exports continued. Counter-signals remain material: an armed group reportedly shut a valve on Libya's Sharara-to-Zawiya pipeline, a Ukrainian drone halted a Moscow refinery and Trump proposed USD5bn to seed a Gulf energy-rebuilding fund while officials considered diesel-price measures. Zelensky offered a ceasefire if Russia agreed; Moscow said talks had not progressed but remained possible, and reports that Trump urged Ukraine to stop refinery strikes linked diplomacy directly to diesel supply. The session reflects lower expected disruption, not a repaired physical system.
DXY rose 0.2% to 100.40, EUR/USD and GBP/USD fell 0.2%, and USD/JPY gained 0.3% despite T-notes rising eight ticks and the US 10-year yield easing to 4.95%. Goolsbee called for courage against inflation; Musalem warned inflation could remain substantially above 2% without more restraint; Collins linked her support for the latest hike and another 2026 increase to renewed Iran fighting. CFNAI slipped to -0.04 from 0.08, leaving communication, energy and the Trump-Xi summit as the main drivers. Lane expects steady but moderate euro-area growth if the energy shock does not intensify and warned a second energy wave would delay inflation convergence. The Bundesbank expects modest Q3 and stronger Q4 activity, but costly energy and healthcare. Relative policy rhetoric supports USD even as lower oil and yields limit the impulse.
US and Chinese officials reportedly spent about 12 hours on economics, tariffs and AI, with potential deliverables including an AI dialogue, incident hotline, another Shenzhen meeting and selective tariff relief for agriculture, medical supplies, energy and low-technology electronics. Greer said soybean commitments and rare-earth shipments were arriving but rejected a broad bargain; Washington reportedly favoured a six-month truce extension while Beijing wanted longer. Vietnam said a US deal was close and denied transshipment after Washington proposed 40% tariffs for routed goods. Japan planned to emphasise investment in Trump's meeting with Takaichi; Brazil held back its reciprocity law during talks; China asked Germany to avoid an EU confrontation. These channels support cyclicals only when concrete tariff and supply-chain implementation follows.
The supplied report said Washington planned to reopen a southern Greenland military base and establish a second eastern presence under an agreement to be formalised with Denmark and Greenland. The narrower plan relies partly on existing facilities, implying compromise rather than a transfer of political control. In Europe, Zelensky said Ukraine was ready for a ceasefire if Russia reciprocated, while Moscow reported no negotiating progress. German political uncertainty rose after CDU state-election losses but did not directly alter the federal government. Gold fell 0.8% as USD firmed and Bund futures gained 69 ticks with Germany's 10-year at 3.45%. The closing regime is risk-on and disinflationary through lower oil, but still exposed to diplomacy failure, maritime incidents and security escalation.
Fed officials kept another hike live even as oil and the 10-year yield fell. DXY 100.40 and weaker EUR/USD and GBP/USD show the policy differential still dominates; the COT flip to -11.22% net short makes continuation less comfortable.
Crédit Agricole CIB sees inflation and fiscal issuance sustaining high rates and a tactical USD recovery; its medium-term fiscal concern limits an unlimited dollar call. ING changed to one more Fed hike, while UniCredit and Natixis read the unanimous move as credibility-supporting but stress the communication and inflation path. MUFG sees near-term USD upside after the Fed; Wells Fargo projects resilient Q3 growth, while Westpac notes low claims and softer housing. SEB puts September PMIs and Fed speakers at the next validation point. MUFG still projects DXY 4.2% lower by Q2 2027 beyond its tactical USD strength. HSBC Asset Management calls two-to-three hikes including September a sensible middle ground: supply shocks lift inflation, but weaker consumers, high valuations and an uneven AI boom make four hikes a growth and risk-asset hazard; it still expects longer-run dollar depreciation.
Fed 28 October — Current Scenario Distribution: Hike 49.29% / Hold 50.71%. Prior (21 September weekly digest): Hike 51.43% / Hold 48.57%. Δ Hike -2.14pp; Δ Hold +2.14pp.
Lane's moderate-growth baseline depends on no second energy wave. German recovery is tentative, political uncertainty rose and EUR/USD fell 0.2%; a sharp decline in October ECB hike pricing weakens the relative-rate cushion.
ING expects a December ECB hike but calls the September message subtly hawkish rather than forceful. UniCredit sees the 2.50% deposit rate at the upper end of its neutral range. Crédit Agricole CIB and SEB judge EUR/USD vulnerable to the energy shock and wider US–EUR rates, while Westpac notes softer final headline inflation. Natixis flags France’s proposed 2027 fiscal effort as a separate political and growth risk. ING treats December as an insurance hike and doubts further tightening if energy falls. Citi Research expects September manufacturing PMI near 53, softer services and a composite around 52; consumer confidence and German political uncertainty are the immediate tests, while improving Italian fiscal performance is a cushion.
ECB 29 October — Current Scenario Distribution: Hike 36.89% / Hold 63.11%. Prior (21 September weekly digest): Hike 48.96% / Hold 51.04%. Δ Hike -12.07pp; Δ Hold +12.07pp.
Rightmove HPI rebounded 0.7% from -2.0%, but no forecast was supplied. GBP/USD still fell 0.2%, and today's borrowing and industrial-order releases test whether the housing improvement extends to broader demand.
ING retains a hold into 2027 contingent on oil falling, whereas MUFG expects a November hike and sees GBP lagging Fed/ECB tightening near term. Citi finds little evidence of second-round inflation but sees the hawkish minority and QT adjustment as meaningful. Danske Bank favours modest GBP weakness on softer labour; Crédit Agricole CIB sees GBP as a pressure valve for fiscal and energy anxiety. Westpac records the 6–3 decision and high headline inflation. Citi says its November-hike case disappears if energy pressure fades before inflation spreads.
BoE 5 November — Current Scenario Distribution: Hike 62.44% / Hold 37.56%. Prior (21 September weekly digest): Hike 63.21% / Hold 36.79%. Δ Hike -0.77pp; Δ Hold +0.77pp.
RBA hike probability remains 93.02% and single-currency retail is 78.1% short, while AUD COT increased to +12.40% net long. Bullock's speech is the immediate test; lower oil, strong equities and trade optionality support the cyclical channel.
Crédit Agricole CIB favours AUD carry from sticky inflation and relative rates, while warning that oil and China can overwhelm the policy edge. Danske Bank recognises the commodity and manufacturing benefit but expects Fed hikes and weak Australian growth to cap AUD/USD. Their disagreement is the horizon and the weight assigned to global risk. Danske Bank also judges pricing for more than two RBA hikes stretched as unemployment rises. Westpac moved its next RBA hike from November to September after Bullock said upside inflation risks were materialising, but still expects a split vote and flags labour, fuel and post-meeting data as conditions for any follow-up.
RBA 29 September — Current Scenario Distribution: Hike 93.02% / Hold 6.98%. Prior (21 September weekly digest): Hike 97.40% / Hold 2.60%. Δ Hike -4.38pp; Δ Hold +4.38pp.
Credit-card spending slowed to 3.5% y/y from 5.3%, but RBNZ hike pricing rose to 62.08% and COT covered sharply to near-flat -1.31%. The domestic policy signal is constructive; 84.7% retail longs make the trade crowded.
Crédit Agricole CIB sees near-term drag from gradual RBNZ normalisation, but acknowledges medium-term agricultural inflation and upside policy risk. Westpac calls the 0.2% GDP rise evidence of resilience despite the Middle East shock. These views agree on the beat but differ on whether it is enough for a sustained FX trend. Crédit Agricole CIB expects oil, USD and AUD moves to dominate NZD near term.
RBNZ 28 October — Current Scenario Distribution: Hike 62.08% / Hold 37.92%. Prior (21 September weekly digest): Hike 59.41% / Hold 40.59%. Δ Hike +2.67pp; Δ Hold -2.67pp.
The 4.3% WTI drop removes part of CAD's terms-of-trade cushion. BoC hike pricing fell 11.68pp to 52.51%; COT shorts covered but remain -10.89%, while 56.7% retail longs add a contrarian headwind.
Danske Bank sees USD/CAD rangebound as oil support competes with US rates and trade uncertainty. Crédit Agricole CIB sees upside USD/CAD risk inside its 1.35–1.40 range if retaliation worsens, while acknowledging the commodity cushion. The policy pricing is more hawkish than these near-term FX calls. Danske Bank expects a BoC hold over 12 months despite market-implied tightening. CIBC Economics expects Canadian retail sales to start Q3 on the back foot as gasoline costs restrict discretionary spending; it argues the BoC should be cautious on the timing and size of further hikes.
BoC 28 October — Current Scenario Distribution: Hike 52.51% / Hold 47.49%. Prior (21 September weekly digest): Hike 64.19% / Hold 35.81%. Δ Hike -11.68pp; Δ Hold +11.68pp.
A bank holiday reduced local liquidity while USD/JPY rose 0.3%. After the delivered BoJ hike, the panel now shows only 31.35% odds of another October hike; COT flipped to +4.27% long and retail is 65% short, so intervention or hawkish guidance can still squeeze tactical shorts.
ING, SEB and MUFG call the hike dovish for immediate JPY, with intervention and a stronger domestic-flow response as counter-risks. Crédit Agricole CIB expects gradual BoJ normalisation under political constraints; UniCredit says recent Japanese US Treasury sales were mostly bills, possibly tied to FX intervention, while longer-bond demand held. Danske Bank retains a structural USD/JPY downside view beyond the near-term disappointment. MUFG would fade USD/JPY buying near 160 as intervention risk rises. Société Générale sees short-term trouble for long-yen positioning and room for a flush, while retaining a positive longer-term JPY view as BoJ policy shifts from generating inflation toward stabilising it; debt and energy still cap gains.
BoJ 30 October — Current Scenario Distribution: Hike 31.35% / Hold 68.65%. Prior (21 September weekly digest): Hike 100.00% / Hold 0.00%. Δ Hike -68.65pp; Δ Hold +68.65pp. The prior 100.00% reading preceded implementation of the delivered 1.25% rate; the change is preserved but is not clean same-state repricing.
SNB hold probability rose to 92.11%, risk appetite improved and CHF remains -8.73% net short in COT. Retail is 65.4% long, adding a contrarian bearish signal; geopolitical relapse is the key haven reversal risk.
ING expects an unchanged 0% SNB rate because resilient growth has not produced inflation pressure. Danske Bank sees wider rate spreads supporting EUR/CHF, while Crédit Agricole CIB sees CHF near one-year lows as the conflict has yet to create enough haven demand; it still flags option demand for protection if escalation turns acute. ING notes ex-petroleum inflation of 0.3%, limiting pressure for an SNB hike.
SNB 24 September — Current Scenario Distribution: Hike 7.89% / Hold 92.11%. Prior (21 September weekly digest): Hike 12.54% / Hold 87.46%. Δ Hike -4.65pp; Δ Hold +4.65pp.
Spot gold fell 0.8% as the dollar strengthened despite lower Treasury yields. Managed Money remains heavily long at +32.48% and retail is 62% long, so the haven thesis needs fresh escalation or a clearer fall in real yields.
MUFG notes gold near USD 4,350/oz after almost 2% rebound as oil and yields eased, but sees Fed tightening as the counterweight. UniCredit points to central-bank buying, ETF flows and fiscal diversification over a longer horizon. Crédit Agricole CIB stays constructive long term on reserve diversification while warning that high US rates can delay the move. UniCredit distinguishes supportive fiscal-led curve steepening from growth-led steepening that can hurt gold. World Gold Council reports broad structural conviction, positive ETF flows and 55-day support near USD4,273/oz despite Fed and USD pressure; USD4,541/oz is the key 200-day resistance, while a sustained break below USD4,231/oz worsens downside risk. ING adds that ETF holdings at a six-month high and central-bank buying can limit weakness.
Fed-linked Fed 28 October — Current Scenario Distribution: Hike 49.29% / Hold 50.71%. Prior (21 September weekly digest): Hike 51.43% / Hold 48.57%. Δ Hike -2.14pp; Δ Hold +2.14pp.
WTI fell 4.3% on diplomacy and continued Saudi loadings. Libya's Sharara pipeline disruption, a halted Moscow refinery and unresolved Hormuz/Red Sea security preserve physical upside risk; Managed Money is still +5.43% net long and retail 67% long.
MUFG sees near-term downside as repairs and transit improve, but treats full Saudi capacity restoration as unproven. UniCredit sees low inventories and tighter products sustaining the geopolitical premium, including European gas transmission. Danske Bank judges the oil balance sharply tighter and vulnerable to a two-chokepoint shock. Horizon differences explain the price relief alongside bullish supply tails. Danske Bank projects Brent near USD 100 through Q1 2027 before supply normalisation eases it. ING attributes the softer open to profit-taking and UNGA/Trump-Xi hopes, but says East-West pipeline damage, missing Saudi allocations, tight refined products and the largest Brent net long since May keep supply risk elevated.
Fed-linked Fed 28 October — Current Scenario Distribution: Hike 49.29% / Hold 50.71%. Prior (21 September weekly digest): Hike 51.43% / Hold 48.57%. Δ Hike -2.14pp; Δ Hold +2.14pp.
S&P 500 gained 1.5% and Nasdaq 100 2.9% as Meta, Intel and AMD led an AI-driven rally. ES COT remains -11.98% but is covering; NQ improved to -1.96% and 75% retail shorts provide contrarian fuel. A 4.95% 10-year yield and further Fed restraint still cap valuation breadth.
UniCredit sees US earnings and AI investment supporting equities, while admitting concentration and pullback risk. MUFG warns that high Treasury yields after the conflict can become a valuation headwind. Wells Fargo projects resilient US growth, but its rate floor raises the multiple hurdle. Natixis, Westpac and SEB document the oil/yield relief rally; ING and Crédit Agricole CIB see long-yield and issuance risks that can outlast the first rebound. MUFG sees the size of yield repricing as more important than a fixed 5% threshold. HSBC Asset Management favours broader global equity participation but warns that much US exceptionalism is priced and that excessive tightening could undermine growth and risk assets.
Fed-linked Fed 28 October — Current Scenario Distribution: Hike 49.29% / Hold 50.71%. Prior (21 September weekly digest): Hike 51.43% / Hold 48.57%. Δ Hike -2.14pp; Δ Hold +2.14pp.
| Market | Section 2 Bias + Short Summary | COT | Retail Sentiment | Final Bias |
|---|---|---|---|---|
| USD | Bullish (+1): Fed rhetoric and relative rates support USD, while the COT flip and lower oil/yields limit conviction.Research Score: +1 | -11.22% ShortCOT Score: -1 15 Sep -11.22% Short vs 8 Sep +10.69% Long (-21.91pp) | Short 64.4%Retail Score: +1 | Bullish +1 |
| EUR | Bearish (-1): weaker ECB pricing and energy sensitivity outweigh moderate-growth support; trade progress is the principal upside catalyst.Research Score: -1 | -3.06% ShortCOT Score: 0 15 Sep -3.06% Short vs 8 Sep -3.53% Short (+0.47pp) | Short 51.7%Retail Score: 0 | Bearish -1 |
| GBP | Bearish (-1): housing improved, but growth/fiscal sensitivity and a small drop in November hike odds keep GBP behind USD.Research Score: -1 | +6.01% LongCOT Score: 0 15 Sep +6.01% Long vs 8 Sep +10.87% Long (-4.86pp) | Long 52.4%Retail Score: 0 | Bearish -1 |
| AUD | Bullish (+1): RBA pricing, COT and contrarian retail align; Bullock, China and stretched pricing are the event risks.Research Score: +1 | +12.40% LongCOT Score: +1 15 Sep +12.40% Long vs 8 Sep +10.93% Long (+1.47pp) | Short 78.1%Retail Score: +1 | Strong Bullish +3 |
| NZD | Bullish research, neutral combined: stronger RBNZ pricing and short covering offset slower spending and crowded retail longs.Research Score: +1 | -1.31% ShortCOT Score: 0 15 Sep -1.31% Short vs 8 Sep -13.77% Short (+12.47pp) | Long 84.7%Retail Score: -1 | Neutral 0 |
| CAD | Bearish (-1): oil relief and weaker BoC pricing dominate; short covering reduces, but does not reverse, the weakness.Research Score: -1 | -10.89% ShortCOT Score: 0 15 Sep -10.89% Short vs 8 Sep -16.56% Short (+5.66pp) | Long 56.7%Retail Score: -1 | Bearish -2 |
| JPY | Bearish (-1) tactically: low follow-through pricing and USD strength dominate, with intervention and positioning as nonlinear squeeze risks.Research Score: -1 | +4.27% LongCOT Score: 0 15 Sep +4.27% Long vs 8 Sep -9.83% Short (+14.10pp) | Short 65%Retail Score: +1 | Neutral 0 |
| CHF | Bearish (-1): funding disadvantage, COT and retail align; acute escalation can override the stack abruptly.Research Score: -1 | -8.73% ShortCOT Score: -1 15 Sep -8.73% Short vs 8 Sep -8.75% Short (+0.01pp) | Long 65.4%Retail Score: -1 | Strong Bearish -3 |
| Market | Section 2 Bias + Short Summary | COT | Retail Sentiment | Final Bias |
|---|---|---|---|---|
| Gold | Bearish (-1) tactically: crowded longs and USD strength outweigh lower yields; unresolved conflict protects the downside tail.Research Score: -1 | +32.48% LongCOT Score: +1 15 Sep +32.48% Long vs 8 Sep +32.82% Long (-0.35pp) | Long 62%Retail Score: -1 | Bearish -1 |
| Oil | Bearish (-1) tactically: de-escalation and crowded retail dominate, while supply outages retain asymmetric upside risk.Research Score: -1 | +5.43% LongCOT Score: +1 15 Sep +5.43% Long vs 8 Sep +5.76% Long (-0.33pp) | Long 67%Retail Score: -1 | Bearish -1 |
| ES | Bullish (+1) research: AI momentum, short covering and lower oil support risk; NQ has the stronger positioning setup than ES.Research Score: +1 | -11.98% ShortCOT Score: 0 15 Sep -11.98% Short vs 8 Sep -16.46% Short (+4.48pp) | Long 51%Retail Score: 0 | Bullish +1 |
| NQ | Bullish (+1) research: AI momentum, short covering and lower oil support risk; NQ has the stronger positioning setup than ES.Research Score: +1 | -1.96% ShortCOT Score: 0 15 Sep -1.96% Short vs 8 Sep -10.80% Short (+8.84pp) | Short 75%Retail Score: +1 | Bullish +2 |