2026-10-31

Overview The Kresmion regime reading edged marginally lower from yesterday and remains Risk-On, with low conviction and only a small positive tilt. Macro Regime Risk appetite dominates at +0.45, nearly three times the next largest factor. Volatility at +0.16 and liquidity at +0.11 add modest support. Growth at -0.17 is the only factor pulling against the Risk-On label, so the reading rests on sentiment and positioning more than on activity. BIS flags three countries as ELEVATED: Australia's debt-service ratio of 20% of income, Brazil's debt-service ratio of 30% of income and Canada's debt-service ratio of 26% of income. On WATCH, Japan shows a debt-service ratio of 16% of income and a credit-to-GDP gap of +5.7pp. Together with the growth reading of -0.17, two independent data classes agree that activity is the weak leg beneath the Risk-On label. Brazil's debt-service ratio of 30% of income means a large share of private-sector income already goes to servicing debt, so any rise in funding costs feeds directly into weaker spending and credit quality. At the company level, PennyMac Mortgage Investment Trust (PMT) carries a critical executive change filing signal. Market Context The US 10-year Treasury yield is 4.98% and the US 2-year yield is 4.61%, a curve slope of +37bps. The US 10-year breakeven inflation rate is 2.34%, and the US 30-year fixed mortgage rate is 7.24%. Federal Reserve total assets stand at $6.75 trillion, with Fed overnight reverse repo usage at $4.38 billion. US initial jobless claims are 194,000, while the University of Michigan consumer sentiment index (US) reads 48.10. The Fed nominal broad US dollar index is at 121.32. Bitcoin trades at $77,264 (-1.73% 24h), Ethereum at $2,243 (-0.09% 24h) and Solana at $95.95 (-2.07% 24h). The largest whale move was 4,101 BTC ($315M) from OKX to an unknown whale wallet. BTC deposit addresses are not tracked, so this does not measure net exchange flow. Watch China's RatingDog Manufacturing PMI is due 2026-11-02 01:45 UTC, with a forecast of 51.6 against a prior of 52.1. A print holding near 52.1 would contradict the copper signal. China sits on BIS WATCH with a debt-service ratio of 19% of income.