2026-06-29

Overview Macro Regime The regime is Neutral, essentially zero with no directional conviction, but conviction in the reading is high. The slight improvement from yesterday is driven by a positive growth factor, which is partially offset by negative liquidity and risk appetite factors. The dominant negative factor is a significant drop in risk appetite. Systemic risk remains elevated in Australia, Brazil, Canada, and France according to BIS debt service ratio readings. Key Risks Geopolitical tensions persist as the US and Iran have agreed to a pause in strikes and scheduled talks, but an Iranian official has concurrently issued a warning to the US over the Strait of Hormuz. Whale activity shows significant Bitcoin movement, including a $35 million outflow from Binance to Binance. Market Context The 10-Year Treasury yield is at 4.40% with a positively sloped yield curve of +31bps. Credit spreads are elevated, with the High-Yield OAS at 278bps and Investment-Grade OAS at 76bps. Financial conditions are loose, as indicated by the negative NFCI reading of -0.5160. Crypto markets are mixed; Bitcoin trades at $60,017, down slightly, while Solana gained nearly 2% to $72.90. The 30-Year Mortgage rate is 6.49%. Watch The most critical upcoming data is a cluster of European inflation rate preliminary readings due tomorrow. Germany's Inflation Rate YoY Prel is forecast at 2.5%, down from a prior of 2.6%, and is due at 12:00 UTC. This will be closely watched alongside releases from France and Italy for signals on ECB policy.