Daily Research
US equities ended mixed: S&P 500 was unchanged at 7,765, Nasdaq 100 rose 0.82% to 30,732, Dow fell 0.36% to 51,869 and Russell 2000 gained 0.51% to 2,890. Semiconductors and memory shares supported NQ, while materials, staples and healthcare led sectors; financials and energy lagged. December futures confirmed the split with NQ +0.7% and RTY +0.6% against ES -0.1% and YM -0.4%. The regime remains selectively risk-on, not a broad index advance.
Trump described a roughly three-hour US-Iran meeting as productive and said another meeting would follow; Witkoff called the process constructive, with Pakistan, Qatar, Oman and Türkiye mediating. Reports said the discussion covered reopening negotiations and the Strait of Hormuz, but Tehran demanded practical guarantees including an end to hostilities, sanctions and the naval blockade, release of frozen funds, an oil waiver and talks on Israel's withdrawal from southern Lebanon. Negotiations have broken the deadlock, yet a settlement still requires multiple steps.
Reports that Iran might reopen Hormuz within seven days if US pressure eased were rejected by Iranian sources cited by Fars. A security source said the strait would remain closed until Tehran's conditions were met; the IRGC said the conflict continued and warned of retaliation across multiple arenas, while Iran reportedly planned to detain vessels until a 20% charge was paid. A senior Iranian official nevertheless said the delegation had authority to pursue diplomacy. Safe passage is therefore an unresolved operational question, not a confirmed diplomatic outcome.
WTI fell 2.7% and Brent 1.8% as diplomacy and renewed Saudi exports reduced immediate scarcity fears. Saudi Arabia restarted the East-West pipeline and prepared Yanbu exports, with tanker activity reported at Ju'aymah and Ras Tanura. Offsetting risks remain: Libya's Sharara-Zawiya shutdown cut output by about 130,000 barrels per day, Washington discussed a USD 10 billion repair fund with Arab states, and Trump examined a diesel-export ban. Lower prices reflect improving expected flows, not a fully repaired supply network.
DXY rose 0.1% to 100.55, EUR/USD and GBP/USD each fell 0.2%, and USD/JPY gained 0.1% after briefly trading below 157.00. Barkin and Collins defended last week's hike: both emphasised broader inflation risk, while Collins supported a somewhat restrictive funds rate. Against that, Richmond manufacturing fell to -2, shipments to -5 and Philadelphia Fed non-manufacturing activity to -22.0, while weekly ADP improved to 20,000. USD retains a rate advantage, but the growth leg is increasingly uneven.
Trump-Xi preparations remained fluid, with no Chinese business delegation expected, while US-China officials discussed an AI safety notification channel. China rejected blame for EU trade problems and discussed auto cooperation with Germany; the UK sought access to the EU's Made in Europe framework, and India was reported to plan a Canada trade agreement. Trump promoted US 'Super Intelligence', while Chinese regulators addressed Vanke loans and investigated DeepSeek and Moonshot AI data routing. The AI and trade impulse is constructive for technology, but still depends on implementation and regulatory containment.
Iran sought a larger Chinese mediation role while Israel prepared for possible renewed strikes and a recall of as many as 200,000 reservists. Qatar, Pakistan and regional states continued diplomacy. Trump and Zelensky discussed ending the Russia-Ukraine war and an energy ceasefire, while the EU extended Russia sanctions for three years. The US also signed a security agreement with Denmark and Greenland, and Rubio pursued talks with Cuba. Gold rose 0.4%, copper 0.8%, Bitcoin fell 0.4% and Ethereum 1.0%. The closing regime is narrow technology-led risk-on with lower oil, but it remains vulnerable to a failed Hormuz process or renewed regional attacks.
ADP improved to 20.0K, but Richmond manufacturing fell to -2. Barkin and Collins kept inflation restraint in focus as DXY rose to 100.55; the sharply short USD COT position limits conviction.
ING Research sees near-term USD risks skewed higher because hawkish Fedspeak can break the usual oil-dollar link; DXY 101 is a tactical objective. MUFG links the stronger dollar to a roughly 55bps rise in 2-year yields and an extended Fed cycle. SEB expects another December hike, while BNY Markets also expects one more 2026 hike but warns supply-led inflation and demand destruction may limit 2027 tightening. Natixis CIB says inflation breadth, alternative core measures and loose financial conditions are central to Chair Warsh's reaction function. Crédit Agricole CIB favours a 2s10s Treasury flattener after the first hike. KBC Economics notes the US curve bull-flattened while multiple Fed officials retained a hawkish tone, keeping energy and risk markets as the immediate drivers.
Fed 28 October — Current Scenario Distribution: Hike 51.43% / Hold 48.57%. Prior (22 September daily digest): Hike 49.29% / Hold 50.71%. Δ Hike +2.14pp; Δ Hold -2.14pp.
Consumer confidence missed at -17 and EUR/USD fell 0.2%, while October ECB hike pricing recovered to 40.77%. Energy sensitivity and French fiscal risk offset the hawkish policy channel.
ING Research says EUR/USD fair value has slipped below 1.150 as the SOFR-ESTR spread rewidened to 150bps; it favours a near-term retest of 1.1320-1.1330 despite a 1.160 year-end forecast. MUFG sees ECB tightening support offset by French fiscal and political risk. SEB expects 25bps hikes in December 2026 and March 2027. KBC Economics sees a 3.5% ECB peak as potentially overdone despite a clearly hawkish stance. Lloyds Bank Market Insights keeps EUR/USD in a lower trend and would sell rallies near 1.1500 unless 1.1528 is recovered.
ECB 29 October — Current Scenario Distribution: Hike 40.77% / Hold 59.23%. Prior (22 September daily digest): Hike 36.89% / Hold 63.11%. Δ Hike +3.88pp; Δ Hold -3.88pp.
Borrowing widened to 18.3B, but CBI orders beat at -9. GBP/USD fell 0.2% and the technical trend remains lower, while 63.07% BoE hike pricing keeps sterling from becoming an outright policy short.
ING Research sees market pricing for BoE tightening as excessive and retains a bearish GBP baseline. SEB expects an energy-driven 25bps November hike but easing from H2 2027. Lloyds Bank Market Insights keeps GBP/USD in a lower trend after failure at 1.3474/83, with 1.3300 and 1.3140 downside references.
BoE 5 November — Current Scenario Distribution: Hike 63.07% / Hold 36.93%. Prior (22 September daily digest): Hike 62.44% / Hold 37.56%. Δ Hike +0.63pp; Δ Hold -0.63pp.
No new numerical release was supplied. RBA hike pricing eased 2.36pp but remains dominant at 90.66%; rising COT longs, heavy retail shorts and a still-bullish technical structure preserve the strongest stack.
Westpac reports Australian yields catching up and September hike pricing remaining elevated, while softer oil and technology strength support risk sentiment. Lloyds Bank Market Insights retains a cautiously bullish AUD/USD view while 0.7094 holds, requiring a move through 0.7147; 0.7043 and 0.7015 are correction risks.
RBA 29 September — Current Scenario Distribution: Hike 90.66% / Hold 9.34%. Prior (22 September daily digest): Hike 93.02% / Hold 6.98%. Δ Hike -2.36pp; Δ Hold +2.36pp.
RBNZ hike pricing rose 10.52pp to 72.60% after hawkish guidance and stronger Q2 growth. COT has covered sharply to near flat, but 81.4% retail longs make the directional setup crowded.
MUFG says Governor Bremen's warning that persistent oil would raise near-term inflation reinforced expectations for a third consecutive 25bps RBNZ hike; stronger 0.2% Q2 growth also supports NZD, though a firmer USD caps the move.
RBNZ 28 October — Current Scenario Distribution: Hike 72.60% / Hold 27.40%. Prior (22 September daily digest): Hike 62.08% / Hold 37.92%. Δ Hike +10.52pp; Δ Hold -10.52pp.
WTI fell 2.7%, removing part of CAD's terms-of-trade cushion. BoC hike pricing edged to 53.77%, but COT remains -10.89% short and retail is 62.1% long.
Natixis CIB notes petro-currencies weakened as Brent moved toward USD100/bbl, with USD/CAD around 1.4018. Lloyds Bank Market Insights keeps USD/CAD in a higher trend above 1.3967/86 and sees scope toward 1.4140/51, implying CAD remains technically vulnerable.
BoC 28 October — Current Scenario Distribution: Hike 53.77% / Hold 46.23%. Prior (22 September daily digest): Hike 52.51% / Hold 47.49%. Δ Hike +1.26pp; Δ Hold -1.26pp.
A bank holiday kept liquidity thin while USD/JPY gained 0.1%. BoJ October hike pricing stayed at 31.35%; JPY COT is now +4.27% long and retail is 64.4% short, preserving squeeze and intervention risk.
Natixis CIB says JPY was the weakest major as USD/JPY rebounded toward 157.51 amid a firmer dollar and uncertain BoJ outlook. Danske Bank still seeks strategic USD/JPY selling opportunities. Lloyds Bank Market Insights is neutral tactically, with upside constrained near 157.75/89 and dip-buying interest above 155.63/73.
BoJ 30 October — Current Scenario Distribution: Hike 31.35% / Hold 68.65%. Prior (22 September daily digest): Hike 31.35% / Hold 68.65%. Δ Hike +0.00pp; Δ Hold +0.00pp.
SNB hold pricing rose to 92.70%. CHF remains -8.73% net short while 60.1% of retail is long; the approaching SNB meeting can still create a haven or policy squeeze.
Natixis CIB observed CHF outperforming USD and EUR ahead of the SNB meeting. Lloyds Bank Market Insights says USD/CHF cleared 0.8198/0.8207 and retains a higher-trend structure toward 0.8333-0.8476, arguing the medium-term rate setup still favours USD over CHF.
SNB 24 September — Current Scenario Distribution: Hike 7.30% / Hold 92.70%. Prior (22 September daily digest): Hike 7.89% / Hold 92.11%. Δ Hike -0.59pp; Δ Hold +0.59pp.
Spot gold rose 0.4% as lower oil eased rate fears and diplomacy remained incomplete. Managed Money is still +32.48% long and retail 67% long, leaving the supportive institutional thesis crowded.
MUFG says gold recovered toward USD4,360/oz as lower oil eased rate-hike concerns; September ETF inflows of about 50 tonnes provide structural support, while persistent inflation and further Fed hikes constrain upside.
Fed-linked Fed 28 October — Current Scenario Distribution: Hike 51.43% / Hold 48.57%. Prior (22 September daily digest): Hike 49.29% / Hold 50.71%. Δ Hike +2.14pp; Δ Hold -2.14pp.
WTI fell 2.7% as diplomacy and Saudi exports reduced the immediate premium. Sharara losses, diesel restrictions, Hormuz charges and Red Sea threats keep physical upside risk live; retail is 59% long.
ING Research highlights Sharara output near 127k bbl/d, Russian diesel-export restrictions and Middle East supply risk. MUFG says diplomacy compresses the geopolitical premium but Hormuz, Saudi infrastructure, Libya and Red Sea disruption keep physical markets vulnerable. Syz Group estimates pipelines and new supply absorbed roughly 35% of the Hormuz shock, inventories 20% and lower consumption 45%, with some cushions temporary. Danske Bank still expects oil to stay elevated near term on tight supply.
Fed-linked Fed 28 October — Current Scenario Distribution: Hike 51.43% / Hold 48.57%. Prior (22 September daily digest): Hike 49.29% / Hold 50.71%. Δ Hike +2.14pp; Δ Hold -2.14pp.
S&P 500 was flat while Nasdaq 100 gained 0.82%, confirming narrow AI and semiconductor leadership. NQ COT has improved to -1.96% and retail is 69% short; ES positioning is less supportive and a 4.96% 10-year yield caps breadth.
Danske Bank says lower oil improves inflation, policy and confidence channels while strong earnings support equities; technology earnings estimates have risen about 45% in 2026. Natixis CIB records a broad European relief rally as oil fell. UniCredit Investment Institute sees the AI capex cycle propagating pricing power through older memory supply chains. Syz Group warns a 10-year yield above 5.10% would raise Nasdaq correction risk even with accelerating earnings.
Fed-linked Fed 28 October — Current Scenario Distribution: Hike 51.43% / Hold 48.57%. Prior (22 September daily digest): Hike 49.29% / Hold 50.71%. 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 dominate mixed growth data; short COT positioning is the main continuation risk.Research Score: +1 | -11.22% ShortCOT Score: -1 15 Sep -11.22% Short vs 8 Sep +10.69% Long (-21.91pp) | Short 67%Retail Score: +1 | Bullish +1 |
| EUR | Neutral (0): firmer ECB pricing and hawkish institutions balance weak confidence, USD spread pressure and fiscal risk.Research Score: 0 | -3.06% ShortCOT Score: 0 15 Sep -3.06% Short vs 8 Sep -3.53% Short (+0.47pp) | Long 51.9%Retail Score: 0 | Neutral 0 |
| GBP | Neutral research (0), bearish combined (-1): conflicting domestic data and firm BoE pricing are outweighed by crowded retail longs.Research Score: 0 | +6.01% LongCOT Score: 0 15 Sep +6.01% Long vs 8 Sep +10.87% Long (-4.86pp) | Long 55.3%Retail Score: -1 | Bearish -1 |
| AUD | Bullish (+1), combined +3: policy, COT and contrarian retail align; China risk and stretched pricing are the principal caveats.Research Score: +1 | +12.40% LongCOT Score: +1 15 Sep +12.40% Long vs 8 Sep +10.93% Long (+1.47pp) | Short 79.4%Retail Score: +1 | Strong Bullish +3 |
| NZD | Bullish research (+1), neutral combined (0): policy support is strong, but crowded retail demands price confirmation.Research Score: +1 | -1.31% ShortCOT Score: 0 15 Sep -1.31% Short vs 8 Sep -13.77% Short (+12.47pp) | Long 81.4%Retail Score: -1 | Neutral 0 |
| CAD | Bearish (-1), combined -2: lower oil, technical USD/CAD strength and positioning outweigh the small policy-pricing rise.Research Score: -1 | -10.89% ShortCOT Score: 0 15 Sep -10.89% Short vs 8 Sep -16.56% Short (+5.66pp) | Long 62.1%Retail Score: -1 | Bearish -2 |
| JPY | Bearish research (-1), neutral combined (0): weak follow-through pricing dominates, but intervention and contrarian retail limit shorts.Research Score: -1 | +4.27% LongCOT Score: 0 15 Sep +4.27% Long vs 8 Sep -9.83% Short (+14.10pp) | Short 64.4%Retail Score: +1 | Neutral 0 |
| CHF | Bearish (-1), combined -3: policy disadvantage, COT and retail align, with geopolitical escalation the nonlinear reversal risk.Research Score: -1 | -8.73% ShortCOT Score: -1 15 Sep -8.73% Short vs 8 Sep -8.75% Short (+0.01pp) | Long 60.1%Retail Score: -1 | Strong Bearish -3 |
| Market | Section 2 Bias + Short Summary | COT | Retail Sentiment | Final Bias |
|---|---|---|---|---|
| Gold | Neutral (0): ETF and geopolitical support balance Fed/USD pressure and crowded positioning.Research Score: 0 | +32.48% LongCOT Score: +1 15 Sep +32.48% Long vs 8 Sep +32.82% Long (-0.35pp) | Long 67%Retail Score: -1 | Neutral 0 |
| Oil | Bearish (-1): diplomacy and contrarian retail dominate tactically, while supply disruption preserves asymmetric upside.Research Score: -1 | +5.43% LongCOT Score: +1 15 Sep +5.43% Long vs 8 Sep +5.76% Long (-0.33pp) | Long 59%Retail Score: -1 | Bearish -1 |
| ES | Bullish (+1): NQ has the stronger +2 combined setup; ES is +1, but high yields and narrow leadership require selective exposure.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): NQ has the stronger +2 combined setup; ES is +1, but high yields and narrow leadership require selective exposure.Research Score: +1 | -1.96% ShortCOT Score: 0 15 Sep -1.96% Short vs 8 Sep -10.80% Short (+8.84pp) | Short 69%Retail Score: +1 | Bullish +2 |