2026-06-28

Overview The macro regime remains Neutral with a slight negative bias, reflecting a tug-of-war between improving growth and deteriorating risk appetite. Geopolitical tensions in the Middle East are the primary headwind, while domestic financial conditions remain accommodative. Macro Regime The Neutral score of -0.2654 is driven by conflicting factor dynamics. A positive growth factor is offset by a sharply negative risk appetite factor, indicating investor caution despite a solid economic backdrop. Liquidity conditions are slightly negative but financial conditions are loose overall, as confirmed by the negative NFCI reading. Systemic risk remains elevated in Australia, Brazil, Canada, and France according to the latest BIS readings. Key Risks Escalating military action between the US and Iran, including new strikes on Qeshm and Bandar Lengeh, poses a critical risk to energy supply chains and regional stability. Concurrently, the Iraqi military's advance into Baghdad's Green Zone adds another layer of geopolitical uncertainty. In crypto markets, significant whale outflows were observed, including a $444 million transfer of SOL from Binance to an unknown wallet, signaling potential selling pressure. Market Context Treasury yields are stable with the 10-year at 4.40% and a positively sloped curve of +31bps. Credit spreads are contained, with investment-grade OAS at 76bps and high-yield at 278bps. Crypto markets are under mild pressure, with Bitcoin at $60,226 and Ethereum at $1,575, both down slightly on the day. The 30-year mortgage rate is 6.49%. Watch The most critical near-term event is the NBS Manufacturing PMI from China, due at 01:30 UTC on June 30th. The forecast of 50.1, barely above the prior 50.0, will be a key test for global growth momentum and commodity demand.