Research
Notes on what the market is doing, and why.
Short, signed pieces on FX, rates, and macro. Each note is reviewed by an editor before it publishes. We do not issue trade recommendations. How we work →
- Read →
US strikes Iran again. Brent surged 9%, dollar firmed, gold broke $4,000.
Fourth US strike on Iran in a week, Iranian attack on a Cyprus-flagged container ship, Iran declaration that the Strait of Hormuz is closed. Brent surged 9.2% to $82.83, dollar firmed on both the oil-inflation channel and the safe-haven bid (DXY 101.28), 10Y pushed to 4.61 (+5bp), USD/JPY reclaimed 162.44, gold broke below $4,000. Tomorrow’s CPI and Warsh testimony now land into a materially different macro backdrop than the Sunday piece assumed.
- Read →
A plain-English guide to how oil shocks transmit to inflation and rates.
Brent surged 9% Monday on renewed US-Iran conflict over the Strait of Hormuz. Oil shocks translate to headline inflation within weeks, core inflation within months, and rate expectations within days. This piece sets out the four transmission channels, the specific lags each carries, and how markets typically price the transmission before the data confirms it.
- Read →
The week the hawkish read landed but didn’t extend. Next week: CPI and Warsh.
FOMC minutes delivered the hawkish read the market pre-positioned into. USD/JPY caught up to the differential Wednesday (+65 pips), then gave the move back Thursday-Friday to close at 161.69. 10Y held +8bp on the week at 4.56. Brent led the tape (+5.6% weekly). The rate market repriced meaningfully; the FX market did not. Next week tests both: Tuesday CPI, Warsh testimony, Wednesday PPI, Thursday retail sales.
- Read →
A plain-English guide to reading Fed Chair congressional testimony.
Tuesday brings Chair Warsh’s first congressional testimony, before the House Financial Services Committee. Testimonies are the most-watched Fed communication event outside the FOMC decision itself. This piece sets out the four sections that carry policy signal, the specific question types to watch for, and how testimony language compares to statement and minutes language across the last three chairs.
- Read →
Minutes delivered hawkish. USD/JPY finally followed yields.
June FOMC minutes released 9-8-1 on the projected rate direction, with inflation risks tilted to the upside and AI infrastructure named as a new supply-side pressure. 10Y jumped 6bp to 4.57. USD/JPY added 65 pips to 162.54, resolving the yen-side leak that had held it below the rate differential all week. Gold pulled back 1.6%. Brent rallied 6.5% on a separate OPEC+ signal. The framework read from Tuesday paid.
- Read →
A plain-English guide to reading a split Fed committee.
The June 2026 FOMC came out 9-8-1 on the projected direction of rates by year-end. That is the most divided committee since the taper-tantrum era. This piece sets out how to read a split committee: which votes matter, how splits resolve, the historical base rates on convergence direction, and why the median dot can be a poor summary when the underlying distribution is bimodal.
- Read →
Yields into FOMC minutes. USD/JPY won’t follow.
US 10Y pushed to 4.51, up 4bp on the session and its highest print since April. The move is straight pre-catalyst positioning ahead of tomorrow’s FOMC minutes release, which will show how Chair Warsh managed a June committee where nine of eighteen officials projected a hike. USD/JPY closed 18 pips lower despite the yield support: the yen-side leak from the Wednesday BoJ meeting is priced into the tape.
- Read →
A plain-English guide to reading FOMC minutes.
The Federal Reserve publishes minutes of its policy meetings three weeks after each decision. The minutes are the most detailed record we get of how the committee thinks — but they require careful reading. This piece sets out the six sections that matter, the language patterns that reveal dissent, and the specific words that shift market pricing when they appear or vanish.
- Read →
USD/JPY retraced 72% of Thursday’s collapse. The cascade hypothesis holds.
USD/JPY closed Monday at 162.07, up 122 pips from Thursday’s 160.85 close and roughly 72% of the way back to Wednesday’s pre-cascade 162.55 print. That retrace is at the high end of typical positioning-cascade shape and outside the range interventions typically produce. DXY held at 100.87 unchanged. The retrace is JPY-specific, not USD-driven, and the MoF is still silent.
- Read →
A plain-English guide to retrace patterns: cascade, intervention, and regime shift.
Large single-session FX moves retrace in three characteristic shapes. Cascades retrace fast and partial (30-50% within 2-3 sessions). Interventions retrace slow and shallow (20-40% over weeks). Regime shifts barely retrace at all. Reading which shape the retrace takes identifies which driver was in charge of the original move — a diagnosis the tape itself provides.
- Read →
USD/JPY collapsed 170 pips. Either the MoF acted, or the market did it for them.
USD/JPY dropped from 162.55 to 160.84 in a single Asian session, five hours before an NFP print of +57k against 115k consensus. DXY broke to 100.75, gold ripped to 4,128, and the 10-year gave back a basis point. The rate leg does not explain the pre-NFP move. The two candidate drivers are unsterilised MoF intervention or a positioning cascade. Which one was in charge changes the trade for next week.
- Read →
A plain-English guide to positioning-liquidation events.
A move too big and too fast to be explained by the macro tape is a positioning event, not a fundamental one. This piece explains the mechanics: what a liquidation cascade looks like from the option-flow and stop-cluster side, how to identify one in real time, and why the direction of the eventual retrace is not the same as the direction of the initial move.
- Read →
Yields to 4.46, Brent to 71. The dollar firms into a divergent tape.
The 10-year pushed another 3bp to 4.463, a new high in the current run. DXY closed at 101.41 (also new). Brent broke to 71.25, a new 90-day low. The commodity leg says demand is fading; the rate leg says the Fed is not close to cutting. Both dollar-supportive individually; taken together the setup is asymmetric.
- Read →
A plain-English guide to the Bank of Japan policy toolkit.
The BoJ policy rate is the headline; it is not the tool. This piece sets out the five instruments the desk actually deploys: the QQE framework, YCC, the Rinban schedule, the JGB purchase cap, and unsterilised FX intervention conducted for the MoF. The seven pressure points in that stack, and what each signals when the Bank moves them.
- Read →
USD/JPY through 162 as yields push. The MoF still says nothing.
USD/JPY closed at 162.64, a new 90-day high and 280 pips through the June 18 break of 161. The 10-year pushed to 4.43 (+4bp). Gold made another new low at 4,006. Every leg of the carry trade got paid on the same session. The MoF has now been silent for six trading days past the point last cycle triggered step-six language.
- Read →
A plain-English guide to yield differentials and FX carry.
The two-year cash-rate gap is the single cleanest driver of every G10 cross. This piece explains why the swap-implied differential (not the spot-rate gap) is what matters, how carry decomposes into hedged and unhedged components, and why the 2026 yen carry has been the trade of the year.
- Read →
Gold broke 4,000. USD/JPY pressed to 162.
Gold lost the four-thousand handle on the day the 10-year rallied 2.7% on the week and the dollar gave back a touch. Both moves should have helped the metal; gold broke down anyway. Meanwhile USD/JPY made a new high beyond the post-FOMC peak with the MoF still silent. Two breaks, two different stories.
- Read →
A plain-English guide to gold as a macro signal.
What gold actually prices: the real-yield identity, the dollar inverse, the central-bank bid, and the risk-off impulse. When these drivers agree the gold print is informative; when they disagree the disagreement is the signal. The framework that turns a single price into a regime read.
- Read →
Core PCE printed hot. The dollar didn’t extend.
May core PCE landed at 3.4% year-on-year, up from 3.3% and the highest since October 2023. The bond market rallied anyway, the dollar gave back a touch, gold drifted lower. The hot print was already priced; the next move is in next week’s data sequence.
- Read →
A plain-English guide to the Taylor rule.
The published policy rule that benchmarks the federal funds rate against inflation and the output gap, the four parameter choices that matter, what the rule recommends today against the 3.4% core PCE print, and why Warsh has hinted the next framework may make explicit reference to it.
- Read →
DXY consolidates. Claims confirmed labour-market firm.
Initial jobless claims fell to 222k; the labour-market read held the hawkish framework. DXY closed at 101.51 after a small pullback from Wednesday’s 101.58 peak. The 10-year held its bond-rally gains. Setup into Friday’s core PCE is clean: the dollar is consolidating, the data is firming, the catalyst is the inflation print.
- Read →
A plain-English guide to nowcasting.
How the Cleveland Fed inflation nowcast and the Atlanta Fed GDPNow models work, what daily inputs feed them, why they tend to beat consensus forecasts by 30-40bp on release day, and how to read them against the upcoming print.
- Read →
Brent breaks $75. Bonds rally. Dollar still strong.
Brent collapsed to $73.38, the 10-year rallied 9bp to 4.40%, gold collapsed through $4,050. DXY pushed to 101.58, the week’s high. Three asset classes pricing a sharp shift in the inflation outlook; the dollar still pricing the rate differential. The decomposition matters.
- Read →
A plain-English guide to the oil market.
Brent vs WTI, the curve structure (contango vs backwardation), what OPEC+ actually controls and what it doesn’t, the geopolitical-premium overlay, and why a $73 print after a $93 peak is the cleanest single read of the Iran de-escalation flow.
- Read →
Dollar extends. Japan looks at its war chest.
DXY closed at 101.37, USD/JPY held 161.60. Tokyo announced a review of its $1.3 trillion FX reserves "war chest"; the draft strategy report is the strongest signal yet that MoF is preparing for sustained intervention. The carry trade kept working anyway.
- Read →
A plain-English guide to central bank FX reserves.
What "war chest" means in practice: the $1.3 trillion Japan holds, how it is composed, what fraction is actually deployable for intervention, and the constraints that make the headline number misleading.
- Read →
DXY hits 101. Asia tests MoF’s resolve.
The Monday open extended the post-FOMC bid. DXY closed at the 101.00 line, USD/JPY at 161.57, gold at fresh lows. Tokyo opens tomorrow with the yen pair 60 pips above Friday’s close and MoF still silent through the weekend. The carry trade is winning.
- Read →
A plain-English guide to real yields.
How a real yield is defined (nominal minus breakeven), the difference between TIPS-derived and survey-derived measures, why real yields drive FX more than nominal yields, and where the current US 10-year real yield at roughly 2.0% places the dollar regime.
- Read →
End of week: MoF talked, didn’t act. The new regime held.
Kihara repeated the step-five formulation. The yen erased all of the April 30 intervention gains. USD/JPY trades above 161, DXY around 100.8, gold at fresh lows. Japan’s intervention dilemma is structural now: the rate differential is too wide for verbal escalation alone to bind.
- Read →
A plain-English guide to the carry trade.
How a carry trade is constructed, the math behind the yield differential and the FX-volatility cost, why USD/JPY is the canonical example, and the historical pattern of why carry trades end (rate convergence, vol spike, or intervention).
- Read →
USD/JPY broke 161. Japan escalated to step-five language.
The post-FOMC dollar bid extended rather than faded. DXY closed at 100.83, USD/JPY at 161.30. Japan’s Chief Cabinet Secretary used the "respond appropriately at any time" formulation that historically precedes operations by days. Warsh said forward guidance is "not well suited" to current conditions.
- Read →
A plain-English guide to monetary policy frameworks.
What a "framework" actually is, the 2020 FAIT regime and why it lasted only five years, the alternatives (Taylor rule, price-level targeting, NGDP targeting), and what Warsh’s "not well suited" comment yesterday tells us about where the framework review is headed.
- Read →
Warsh delivered hawkish. DXY finally broke 100.
Median 2026 dot to 3.8% from March’s 3.4%, turning the next move from a cut into a hike. Median PCE projection to 3.6% from 2.7%. Statement cut to 130 words from 341. Warsh declined to submit a dot. DXY ripped through 100 to close at 100.35; the round number we flagged for two weeks finally fell.
- Read →
A plain-English guide to financial conditions indices.
How the Goldman, Chicago Fed, and Bloomberg FCIs are built, why the Fed treats them as the policy-transmission channel, and what a 50-basis-point move in the index actually does to real-economy outcomes.
- Read →
FOMC day one of two: the tape positioned dovish.
Ahead of tomorrow’s 2pm decision and SEP, hold is priced at 97%. The 10-year rallied 4bp to 4.43%, DXY dropped to 99.54 (fifth sub-100 close, the lowest of the run), Brent collapsed another $4 to $78.66, gold firmed to $4,340. The cross-asset board is positioned for a dovish SEP. If Warsh delivers hawkish, there is real room for reversal.
- Read →
A plain-English guide to forward guidance.
How the Fed communicates intent through statement language, the SEP, and the press conference, the four eras of guidance (qualitative, calendar, threshold, state-contingent), and the language hooks markets actually trade.
- Read →
FOMC eve: what’s priced and what isn’t.
Markets price 86% probability of a hold and a median 2026 dot at 4.00%. The dot plot is the catalyst. DXY at 99.66, fourth sub-100 close. Brent extended its slide to $83 on Iran de-escalation, taking the energy-driven inflation channel off Warsh’s table. What the meeting can actually price.
- Read →
A plain-English guide to r-star, the neutral rate.
What r-star actually is, the three models (Laubach-Williams, Holston-Laubach-Williams, Lubik-Matthes) that estimate it, why the longer-run dot is essentially r-star plus 2 percent, and why Warsh’s drift on this number is the most durable signal in the SEP.
- Read →
End of week: Michigan unmoored. DXY couldn’t break.
Michigan 5-year inflation expectations jumped 40 basis points to 3.9%, the survey-based "unmooring" signal that the breakevens piece flagged. DXY closed at 99.81, the third sub-100 close. Brent collapsed to $86 on Iran de-escalation chatter. Warsh’s first FOMC Tuesday lands into a mixed cross-asset board.
- Read →
A plain-English guide to inflation expectations surveys.
The four surveys central banks watch — Michigan, NY Fed SCE, the Conference Board, and the SPF — what each one asks, why the Fed weights them differently, and the "anchored vs unmoored" framing that today’s Michigan long-run jump just put on the table.
- Read →
DXY tested 100 again. The round number won.
DXY spiked to 100.23 intraday before reversing to close at 99.93, the second sub-100 close of the week. The round number is doing real technical work; the post-CPI follow-through that the rate-differential story implied did not arrive.
- Read →
Headline CPI 4.2%. Core under-shot. DXY took the headline.
May headline CPI printed 4.2% year-on-year, the highest since April 2023. Core ticked to 2.9% with monthly core only +0.2%, below the 0.3% consensus. The Iran-driven energy shock did most of the headline work. DXY closed at 100.05, holding above the line.
- Read →
A plain-English guide to CPI components and the supercore.
The four categories that make up the CPI basket, the OER trick that makes shelter dominate the index, why the "supercore" (services ex-housing) is the cleanest demand read, and the math behind the sub-component weights.
- Read →
Tuesday auctions delivered. Markets coiled into CPI.
Both the 3-year and 10-year Treasury auctions priced cleanly with no meaningful tail. Indirect bidders took 70% of the 10-year, the cleanest foreign-demand read since the spring. DXY consolidated 100.0, EUR/USD held its post-NFP range, all sitting on hands for Wednesday’s CPI.
- Read →
After the shock, no give-back. CPI Wednesday.
The Friday NFP move held the weekend without retracement. DXY at 99.90, USD/JPY 160.31, no MoF intervention overnight. December hike odds ticked further to 70%. CPI Wednesday is the next test.
- Read →
A plain-English guide to inflation breakevens.
How TIPS-vs-nominal gives you a market-implied inflation expectation in one number, why the 5y5y forward is the cleanest read of long-run anchoring, and the construction math behind both, written for the CPI Wednesday and the SEP in two weeks.
- Read →
The OIS curve repriced. From cuts to hike risk in five sessions.
In late April markets priced 50 basis points of cuts by year-end. Now the year-end fed-funds path implies a 60% probability of a hike. That is a ~100bp swing in expected-rate space in roughly six weeks, with most of it in the last five sessions.
- Read →
A plain-English guide to the SEP and the dot plot.
What the Summary of Economic Projections actually is, how the dot plot is assembled, the difference between the median dot and the consensus call, and why Warsh’s first SEP at the 16-17 June meeting is the most-watched piece of paper of the year.
- Read →
End of week: the thesis missed. Here is the post-mortem.
NFP +172k against an 85k consensus. March and April revised up a combined 93k. DXY at the 100 line. The data-not-dots call did not survive contact with the data. What the thread got right, what it got wrong, and where the chain goes from here.
- Read →
A plain-English guide to the NFP report.
Two surveys, one release: the establishment survey that counts jobs, the household survey that counts people, the birth-death model that adjusts for new firms, and the benchmark revisions that quietly rewrite the picture once a year.
- Read →
USD/JPY broke 160. Powell pushed back. NFP tomorrow.
The yen broke through MoF’s 2024 intervention zone, Powell issued his first post-term public statement defending Fed independence, and DXY held the top of the range into Friday’s payrolls. The dollar thread is one print from a regime call.
- Read →
A plain-English guide to FX intervention.
When Japan’s MoF actually steps in, the difference between verbal and actual intervention, the 2022 and 2024 precedents, and what to watch in the price action around USD/JPY 160.
- Read →
Two more upside prints. The thesis is in trouble.
ADP printed 122k against 117k consensus. ISM Services held 53.6. DXY extended to 99.45, the top of the May range. Three upside surprises in three days is no longer noise. The data-not-dots call is being seriously tested.
- Read →
A plain-English guide to ADP vs nonfarm payrolls.
Two payroll measures, three structural differences, and the rule of thumb that lets you translate an ADP surprise into an expected NFP reaction. The math behind why they diverge by 100k or more in a single month.
- Read →
JOLTS sent a mixed signal. The dollar held its ISM gains.
Openings jumped to 7.6 million, hires fell to 5.1, quits flat at 3.0. The print is the textbook signature of a frozen labour market: vacancies up, matching down. DXY held 99 but did not extend.
- Read →
A plain-English guide to the Beveridge curve.
The vacancy-unemployment relationship that sits behind every JOLTS release, the post-pandemic outward shift and what is reversing it, and the u* = √(uv) shorthand for reading the curve in one line.
- Read →
ISM came in hot. The dollar took it.
Manufacturing PMI printed 54.0 in May, the highest since 2022, with new orders surging to 56.8. DXY bounced back through 99, bonds sold off, Brent ripped. The first contrarian print in the data-not-dots thread is on the tape.
- Read →
A plain-English guide to economic surprise indices.
How the Citigroup CESI is built, why FX desks watch it more than the prints themselves, and the math behind translating an upside ISM into the index move it produces.
- Read →
End of week: the data thesis is in the price now.
A week ago the dollar was at 99.32 and the call was that data, not policy, would move it. Five sessions, two reference pieces and one PCE print later, DXY closed at 98.94 with the bond rally and the correlation matrix in agreement. Where the thread stands going into next week.
- Read →
Core PCE ticked up. The dollar didn’t.
April Core PCE printed 3.3% YoY against 3.2% prior. DXY closed lower, the 10-year held its rally. A move in the wrong direction on a hawkish print is the cleanest read on how positioning was sitting going in.
- Read →
A plain-English guide to PCE vs CPI.
Why the Fed reads PCE instead of CPI, what the trimmed-mean variant adds (and why the new Chair prefers it), and how to translate a print in one measure into the other.
- Read →
DXY finally moved. The data side took the wheel.
DXY broke 99 ahead of the Q1 GDP second estimate and the 7-year auction. Brent kept sliding, gold caught a bid, the 10-year rallied further. The data-not-dots thesis just printed.
- Read →
A plain-English guide to the dollar smile.
Stephen Jen’s three-regime framework for the dollar, the math behind the smile shape, and where DXY actually sits today between left-side risk-off, middle-trough underperformance, and right-side US exceptionalism.
- Read →
Confidence beat consensus, bonds rallied, dollar shrugged.
May Conference Board confidence printed 93.1 against a 92 consensus. The 10-year rallied 7 basis points. DXY closed flat. The data-side thesis is being expressed in rates now, not in FX.
- Read →
A plain-English guide to the term premium.
Decomposing a 10-year Treasury yield into the expected path of policy and the term premium, the math from the ACM model, and why the bucket has gone from deeply negative to firmly positive in this cycle.
- Read →
A new Chair, a record-low Michigan print, and the dollar still hasn’t moved.
Warsh was sworn in as the 17th FOMC Chairman. May Michigan sentiment was revised to 44.8, a record low. DXY at 99.24 has shrugged at both.
- Read →
A plain-English guide to COT positioning, with corn as the case.
How the CFTC Commitments of Traders report is built, the math that turns a raw net-long number into a percentile, and what May’s corn print is saying about a crowded long.
- Read →
Three sessions on: the dollar story is still about the data.
DXY held the line into the long weekend. The OIS path is unchanged. The cross-asset correlation matrix is doing the talking now.
- Read →
A plain-English guide to currency correlations.
What the correlation between two markets measures, how to compute it in five lines of arithmetic, and the one cell of today’s dollar matrix that’s gone the wrong way.
- Read →
EUR positioning has caught up to the dollar’s slide.
CFTC net longs in the euro have rebuilt from a 1-year low in March to an 18-month high. The easy carry on this side is gone.
- Read →
The dollar is weaker on the data, not the dots.
DXY has drifted off the March highs while OIS-implied policy is little changed. The slide is in the activity prints, not the Fed reaction function.
- Read →
Why the curve un-inverted without a recession.
Term-premium normalisation explains most of the bear-steepening. Growth surprise indices remain soft.
- Read →
A plain-English guide to OIS.
What overnight-index swaps measure, what they do not, and how to read them against fed-funds futures.
Subscribe via Atom. New notes appear here as they are published. Older notes are kept readable for at least two years and any corrections carry a dated note.