2026-05-31

Overview The macro regime remains Neutral with a slight positive bias, though conviction is high and yesterday saw a notable decline in the score. Macro Regime The Neutral reading is driven by a significant positive volatility factor offsetting a negative growth impulse. Liquidity conditions remain accommodative, as evidenced by a negative NFCI reading, while risk appetite is mildly positive. The volatility factor is the primary driver of the current regime. The BIS flags elevated systemic risk from household debt burdens in Australia, Brazil, Canada, and France. Key Risks Geopolitical tensions are elevated following OSINT reports of Ukrainian drone strikes on a sanctioned oil tanker and Iranian actions injuring US troops and damaging drones in Kuwait. Whale activity included two separate inflows of over 300 BTC each from unknown wallets to Binance, totaling $40 million. Market Context The yield curve maintains a positive slope of 46 basis points, with the 10-year Treasury at 4.45%. Investment-grade credit spreads are tight at 73bps. Mortgage rates are elevated at 6.53%. Bitcoin trades near $73,924, with Ethereum and Solana also showing modest gains. Consumer sentiment remains depressed at 49.80. Watch The NBS Manufacturing PMI for China is due at 01:30 UTC, providing a critical read on global industrial demand with a forecast of 50.0, down from the prior 50.3. This release will be closely watched for signs of economic softening in a key growth engine.