Fundamental Overview
Global markets remain caught between rising bond yields, energy-supply risks and a resilient AI trade. Demand increased at both the 10-year and 30-year US bond auctions, yet yields continue pushing higher, increasing refinancing costs and reinforcing concerns around US debt.
Attention now turns to US CPI. Headline CPI is forecast at 3.4% year-on-year, while core CPI is expected at 2.4%, down from 2.5%. UK GDP surprised positively at 0.4% month-on-month versus 0.0% expected. Middle East conflict, disruption around the Strait of Hormuz and Red Sea, and approaching winter energy demand remain important risks.
Risk Sentiment
Sentiment remains mixed despite what was described as a very risk-off bond-market backdrop. Equities have not produced the inverse response normally expected as yields rise, while the AI trade remains indecisive. This disconnect leaves broad risk conditions unclear.
Technical Overview
US Oil exceeded $104 yesterday before pulling back. The preferred bias remains towards buying US Oil at lower prices if an opportunity develops. EUR/JPY and GBP/JPY retain a downside bias, with ongoing yen strength favoured.
The Nasdaq remains in consolidation, while a potential sell opportunity may develop. The team is already positioned for S&P 500 downside. Across the broader markets, consolidation remains dominant, reinforcing the need to wait for clearer opportunities rather than force a directional view.
Focus for Today
CPI is the central event. With consolidation widespread and expectations not fully aligned with current price action, patience is essential. The priority is to keep options open, wait for opportunities and maintain discipline with capital, trade management and risk.
To develop the skills required to identify and manage high-probability trading opportunities, apply for discounted access to our Financial Trading Mentorship Programme. Simply submit the form by clicking here to receive more information.