Key Takeaways: • Wheat prices soared +5.24% (4.51σ) as concerns over supply disruptions made headlines. • The 6-month Treasury yield dropped -8.0 bp (3.57σ) reflecting declining inflation expectations. • GBP/USD rallied +1.12% (3.63σ), buoyed by softer-than-expected US PPI data reinforcing the Fed's cautious stance. Recommendations • Consider going long on commodities—specifically wheat—due to supply concerns driving prices. • Look to enter short positions in US Treasuries, particularly in the 6m to 2Y segment, as market expectations increasingly reflect a dovish Fed outlook. • Explore shorting the tech sector in anticipation of sector-specific earnings volatility, as seen with recent lower performance in major tech stocks like Microsoft and Tesla. Market Wrap The market session witnessed a significant divergence in risk appetite as major indices in the US showed mixed results, driven by macroeconomic indicators and geopolitical tensions. Notably, the introduction of US military strikes on Iran added to global uncertainty, but optimism around inflation data provided a counterweight. The Nasdaq Composite increased by +0.62%, buoyed by robust earnings from mega-cap tech stocks such as Apple (+4.01%) and Alphabet (+3.17%). These gains were partially offset by declines in sectors like technology (-1.11%) and utilities (-1.03%). The mixed sentiment suggests a cautious yet optimistic tone among investors, focusing on recent earnings while navigating geopolitical risks. The economic calendar featured a surprise drop in the Producer Price Index (PPI), decreasing by -0.3% compared to an expected increase of +0.1%. This miss seems to have contributed to market reactions—evidenced by the softening in Treasury yields across the curve, particularly the 6-month Treasury yield which fell -8.0 bp to 3.95%. With breakeven inflation rates also declining, as the 5-year breakeven fell to 2.25%, inflation expectations have started to temper, leading investors to reconsider their outlook on Fed rate hikes. Atlanta Fed GDPNow estimates for Q2 growth remain at 1.26%, indicating moderate growth yet raising questions about economic momentum amid tightening conditions. In terms of Treasury yields, the curve generally flattened as 1Y and 2Y yields fell by -10.0 bp and -8.0 bp respectively, suggesting market participants are factoring in a more dovishly inclined Fed. Our liquidity regime signal shows a deteriorating situation, with a negative momentum reading of -0.830, indicating tightening liquidity conditions. This deterioration aligns with fell Treasury yields and reinforces the cautious risk-off tone in the broader market. On the equity front, the technology sector showed divergent performance, wherein heavyweight stocks such as Apple and Alphabet outperformed, while others like Tesla (-0.43%) and Microsoft (-1.11%) faced pressure from ongoing profit-taking after previous gains. As tech earnings reports loom, the sector shows signs of fragility, implying a cautious strategy may be prudent going into this earnings season, particularly with expected volatility as companies report. In the commodities arena, wheat prices surged by 5.24% due to supply concerns exacerbated by geopolitical tensions—a significant outlier reflected in the unusual moves list (+4.51σ). Traders should monitor this closely as disruptions could further impact agricultural prices. In the energy sector, crude oil showed modest increases as geopolitical tensions increased, adding another layer of complexity for growth outlooks. There were also notable forex movements; GBP/USD's +1.12% rise aligns with dollar weakness attributed to softer PPI data impacting rate projections. Looking ahead, the economic calendar features critical data including Core Retail Sales on Thursday, expected flat at 0.0%, and the Philly Fed Manufacturing Index, which could set the tone for further market movements. Earnings reporting from major tech firms like Netflix and GE later this week could serve as additional catalysts, impacting the overall sentiment further. In conclusion, the market remains cautiously optimistic, with mixed signals reflecting the complex interplay of inflation pressures, earnings expectations, and geopolitical risks. Investors are advised to consider exposure adjustments in equities and commodities, while closely monitoring the evolving macroeconomic landscape.

• US Treasury yields rose sharply today, with the 3-year yield jumping 8.0 bp (2.2σ), reflecting elevated rate hike expectations post-CPI data release. • Healthcare stocks faced notable weakness, driven by poor sentiment after healthcare earnings were scrutinized amidst tomorrow's earnings releases, pushing the sector down 1.93% (2.05σ). • The VIX surged 14.17% (1.81σ) as market participants reevaluated risk positions following mixed inflation data and geopolitical tensions. Recommendations • Consider shorting healthcare equities — the sector is underperforming due to shaken investor confidence ahead of earnings. • Look for opportunities to add duration via 10-year Treasuries — yields have room to stabilize after today’s inflation data, presenting a good entry point. • Explore positioning in energy stocks as crude prices surged 2.67%, bolstered by geopolitical tensions that may lead to further supply constraints. Today, the markets reacted sharply to the latest inflation data while grappling with geopolitical tensions, particularly involving oil supply disruptions linked to US-Iran hostilities. According to Reuters, oil prices surged over 2%, reaching a one-month high. The CPI data released indicated a drop of 0.4% for June, coming in cooler than expectations, which contributed to the mixed sentiment surrounding rate hike expectations as Fed Chair Warsh's testimony suggested caution in declaring victory over inflation. Per the economic calendar, today’s significant release was the Consumer Price Index (CPI) for June, which printed -0.4% m/m vs. a forecast of -0.1%, and y/y CPI was at 3.8%, lower than the prior 4.2%. Additionally, core CPI came in at 2.6%, which was below the anticipated 2.8%, helping to buoy sentiment within equities, particularly growth sectors. The initial reaction saw a slight bounce in equities; however, concerns lingered over whether the Federal Reserve would maintain its hawkish stance. In the fixed income market, US Treasury yields spiked across the curve, most notably the 3-year yield, which increased by 8.0 bp (2.2σ), as investors recalibrated their expectations for monetary policy in light of the CPI print, viewing this data as a catalyst for sustained rate hikes. The 10-year Treasury yield also saw a rise of 6.0 bp, indicating a flattening yield curve which signals concerns about future growth amid aggressive rate adjustments. Corporate yields also increased, particularly within the CCC segment, which rose by 8.0 bp, reflecting a cautious risk-off mood. In equities, the Nasdaq composite gained 0.90%, largely driven by strong performances from mega-cap technology stocks, including Nvidia, which surged 4.06%. However, the health care sector was a notable underperformer, declining by 1.93% amidst scrutiny of earnings, with many pharmaceutical companies facing investor skepticism over their growth prospects post-earnings releases. Companies like Johnson & Johnson and UnitedHealth Group, reporting earnings tomorrow, will likely set the tone for further moves in this sector. Among commodities, a significant reaction to geopolitical developments saw crude oil prices surge, with both Brent and WTI increasing over 2%. The increased energy costs correlated with rising inflation expectations, as evidenced by the increase in inflation breakevens, suggesting a need for traders to adjust their inflation hedges. Notably, palladium and gold also fared well today, likely as a response to both inflationary pressures and flight-to-quality strategies. Our liquidity regime signal shows deteriorating conditions with a momentum reading of -0.834, suggesting that financial conditions are tightening; the signal remains negative overall, indicating economic concerns persist along with investor hesitance toward increasing exposure to risk assets. Despite this, the acceleration component is building, illustrating that while liquidity conditions are tight, the pace of deterioration may be stemming. In terms of prediction markets, we note Polymarket shows an 85% probability for the Fed to maintain a target range of 3.50-3.75% through July, reinforcing the notion of a steady Fed stance despite today’s inflation readings. This aligns with our macro regime classification of Slowdown / Hot / Neutral, which captures mixed signals across growth, inflation, and policy stance. Investors should remain cautious, closely monitoring tomorrow's healthcare earnings releases and upcoming inflation readings, notably the Core PPI, which may further clarify the Fed's monetary policy direction. Looking ahead, the markets are entering a crucial period wherein macro data and earnings reports could significantly impact sentiment. Fed communications and futures pricing suggest that investors should prepare for continued volatility, particularly within sectors sensitive to inflation and growth prospects. The upcoming releases, including the Fed Chair's testimony and PPI, are key catalysts to watch. Overall, the market tone remains cautious with an underlying risk-off sentiment as investors digest complex economic signals and geopolitical risks, thus positioning appropriately in both duration and sector-specific equities should be prioritized.

• Brent crude oil surged 9.50% (2.57σ), driven by escalating US-Iran tensions influencing energy markets. • The Kospi dropped sharply by 6.65% (3.50σ) as investor sentiment turned risk-off amid geopolitical concerns. • VIX volatility index rose 14.17% as market participants reacted to heightened uncertainty over Middle East tensions. Recommendations • Consider long positions in energy ETFs, capitalizing on the oil price surge and geopolitical volatility. • Short Korean equities and related ETFs, as destabilization due to geopolitical risks is likely to persist in the short term. • Hedge equity exposure with VIX calls to mitigate potential downturns as uncertainty looms over markets. Today’s session saw significant price moves across various asset classes, primarily driven by escalating geopolitical tensions, particularly between the US and Iran. Notably, Brent crude oil soared by 9.50% following reports of aggressive military actions and threats to maritime security in the Strait of Hormuz. This conflict has heightened concerns about oil supply, sending prices surging. Indeed, the crude oil price rally had a knock-on effect, with the broader energy sector reflecting strong gains as investor sentiment shifted. On the other hand, the Kospi suffered a dramatic decline of 6.65%, marking significant risk-off sentiment; the index is heavily influenced by global trade dynamics and geopolitical tensions, making it particularly vulnerable in environments of uncertainty. From an economic data perspective, the calendar was relatively light, with today’s focus primarily on a speech by FOMC members which yielded mixed insights into the Fed's ongoing approach to monetary policy. However, upcoming economic calendar releases, notably tomorrow’s CPI print, will be crucial in shaping market expectations for future rate moves. The consensus for July’s CPI is forecasted at -0.1% m/m, decreasing from 0.5% in June, which may bring further policy adjustments into focus, and significantly affect bond yields and equity markets. In the treasury market, yields moved modestly higher across the curve, with the 2-year note climbing 5 bp to 4.21%. This rise indicates expectations of potential Fed action in light of deteriorating macroeconomic indicators. The market’s implied probability around rate moves indicates expectations of a hold at the July meeting, with 56.2% predicting a 3.50% to 3.75% range. The 20-year bond yield, meanwhile, hovered at 5.08%, reflecting a mixed sentiment on long-term growth prospects given current geopolitical uncertainties. Equity markets reflected this geopolitical unease markedly, with the Nasdaq composite down 1.55% while the Dow and S&P 500 also fell, albeit less sharply. Major tech stocks faced pressure, with Nvidia and Tesla notably declining by 3.52% and 3.19%, respectively, as investor caution weighed on high-growth sectors amid rising fears about the broader economic landscape. This backdrop reinforces the macro regime classification as "Slowdown / Hot / Neutral," suggesting a mixed market environment where inflation remains a key concern but growth indicators signal softening. Among commodities, energy assets were clear outperformers. Additionally, the volatility in oil prices lends support to the view that inflationary pressures may remain persistent, supporting a potential continuation of the high-rate regime, which is causing market participants to reevaluate asset allocations toward inflation-sensitive securities. The liquidity regime signal currently reflects a deteriorating momentum, aligning with today’s risk-off sentiment; this could lead to more cautious positioning in equities, particularly tech sectors. Unusual moves in the Kospi and Brent crude highlight the impact of shifts in geopolitical sentiment on market pricing and risk perceptions, warranting a strategic reevaluation of exposure to these assets as conditions continue to evolve. As the market prepares for the critical CPI release tomorrow, investor sentiment remains cautious amid volatile conditions. The anticipated outcomes could reshape expectations on interest rates and overall economic health. Volatility hedges may provide a necessary buffer as uncertainty over geopolitical developments and inflation dynamics persists.

• Meta Platforms surged 5.97% (2.56σ) as AI investments driven by earnings sentiment continue to rally. • Cocoa plummeted 6.17% (2.88σ), reflecting potential supply disruptions and market fears. • US Treasury yields were mixed; 1m yields rose 5 bp (2.63σ) while 2y yields fell 5 bp (1.19%). Recommendations • Consider long positions on Nvidia — strong demand in AI sectors coupled with sentiment-driven price movements may provide upside. • Explore short positions in cocoa — increased supply fears may lead to further downward price pressure in the coming sessions. • Increase defensive positions in utilities and staples — current economic indicators suggest uncertainty in growth, pushing investors towards safer sectors. Today’s market action concluded with a mixed tone as investors navigated between solid corporate performance and geopolitical tensions. Notably, Meta Platforms soared 5.97% after strong remarks from CEO Mark Zuckerberg regarding future data center innovations and AI developments, which reaffirmed bullish sentiment regarding technology equities amid the broader focus on AI. Conversely, cocoa sharply declined 6.17%, driven by fears of supply disruptions, exacerbated by recent agricultural output warnings. Market participants reacted to a report highlighting growing concerns about inflation impacts tied to agricultural commodities and ongoing geopolitical tensions, which has added complexity to the risk environment. Today's economic calendar featured stability in key growth indicators with building permits and housing starts showing no change from previous levels. The Atlanta Fed GDPNOW's current estimate for Q2 2026 GDP growth remains at 1.26%, suggesting a slow growth trajectory. This aligns with the mixed macro signals indicated in our liquidity regime signal, which points to deteriorating liquidity conditions. The composite signal reads -2.883 with a negative momentum, reflecting tighter credit and rising inflation expectations amidst stagnant economic data. Investors appeared to weigh these macroeconomic undercurrents against recent earnings reports, favoring equities in tech while expressing caution towards cyclicals. In the bond space, US Treasury yields exhibited a mixed response, with the 1-month Treasury yield rising by 5 bp to 3.72% (2.63σ), indicating demand for short-term securities possibly spurred by concerns of short-term inflation and policy moves, while the 2-year yield fell 5 bp to 4.16% (-1.19%), likely reflecting a more dovish sentiment on monetary policy as traders recalibrate future Fed rate expectations. As implied by the CME FedWatch tool, probabilities suggest a 64.7% chance of the Fed maintaining rates at 3.50-3.75% at the upcoming July meeting, reinforcing market sentiment that an interest rate hike may be off the table for the foreseeable future. Equity markets across major indices displayed a generally positive lean, with the S&P 500 adding 0.42% while the Russell 2000 slipped 0.49%. Sector performance was characterized by gains in materials (+1.25%) and utilities (+0.62%) amidst a backdrop of rising uncertainties, directing investment towards defensive stocks. Specifically, noteworthy movers included Nvidia, which appreciated 4.03%, riding on the AI wave, coupled with rising awareness of semiconductor supply providence amidst increased demand. In commodities, the strong volatility of cocoa aligns with fears regarding agriculture-linked inflation pressures, reflecting market's concerns about supply chain disruptions, likely influencing trading dynamics. With energy prices also dampened slightly, WTI crude fell by 0.42% to $71.51 amid expectations for continued shipping stability in the Strait of Hormuz despite geopolitical tensions. Evaluating this alongside foreign exchange movements, the USD/mxn pair experienced a minor decline, suggesting a lack of strong directional bias in currency markets. Looking ahead, the macro regime classification indicates a "Slowdown / Hot / Neutral" state due to mixed signals on growth, inflation, and policy. Investors should watch for upcoming economic releases, particularly the Retail Sales and Producer Price Index data next week which could surface macroeconomic implications as growth signals remain tentative. Overall, the market tone appears cautiously risk-on, but investors should remain vigilant as the macro landscape evolves with global dynamics at play.

WEEKLY MARKET REVIEW: July 6 - July 10, 2026 Key Developments: - Positive risk sentiment predominated early in the week, particularly in the technology sector, but gave way to volatility amidst geopolitical concerns and mixed economic indicators. - Agricultural commodities displayed significant price movements, with cocoa surging on supply fears early in the week but later experiencing a sharp decline, highlighting the volatile nature of the market. - US Treasury yields were mixed throughout the week, reflecting uncertainty over inflation trajectories and Fed policy outlook, while liquidity conditions continued to tighten. - The macro regime remains classified as "Slowdown / Hot / Neutral," suggesting an ongoing struggle between growth and inflation dynamics. --- This week’s market narrative is dominated by a complex interplay of risk sentiment, geopolitical tensions, and mixed economic data. Risk-on sentiment initially took hold early in the week, lifting major equity indices and tech stocks such as Meta Platforms and Tesla, buoyed by optimism over corporate strategies and technological advancements. However, as the week progressed, caution emerged—primarily in response to geopolitical threats, nudging market participants to recalibrate their positions and expectations. On Monday, key stock indices rallied, with the Wilshire 5000 up 1.63% and Tesla shares climbing 6.69% amid positive news regarding its expansion into Miami. This bullish tone was mirrored across agricultural commodities, where cocoa spiked 15.64% due to supply disruption concerns (z = 4.52σ), further underpinning the theme of scarcity in certain sectors. However, data released during the week, including an ISM Services PMI that indicated a slight contraction and a consumer sentiment index tracking consistent worries among consumers, painted a more cautious economic picture. Tuesday introduced volatility amid profit-taking and geopolitical tensions, specifically impacting oil and coffee markets. Brent crude oil surged 5.17% (z = 3.4σ) due to OPEC+ supply constraints amid Middle Eastern tensions, but coffee prices plummeted 8.61% (z = -4.6σ), driven by oversupply concerns that contradict the earlier supply-based narratives. Such disparities reflect the nuanced dynamics influencing various commodity classes simultaneously and the risk of abrupt market reversals. Wednesday's session intensified risk aversion, with U.S. Treasury yields increasing sharply following the FOMC meeting minutes, implying heightened expectations of future rate hikes. Heating oil surged by 10.56% (z = 2.98σ) amidst further escalation in Middle Eastern tensions, while the broader equity markets and the Dow Jones Industrial Average fell under the weight of geopolitical uncertainty. The Atlanta Fed's GDPNow indicator projected a modest growth of 1.26% for Q2, further contributing to the consensus of a slowing economy in juxtaposition to rising inflationary pressures. As the week unfolded, the narrative took a sharper turn, particularly Thursday with a significant drop in crude prices (WTI decreased by 3.95%), showcasing investor apprehensions about demand destruction against a backdrop of deteriorating liquidity conditions. The Hang Seng Index, however, rose 2.99% as tech optimism from sentiment surrounding semiconductor developments countered broader regional declines, indicating pockets of resilience amidst a global risk-off sentiment. On Friday, Meta Platforms continued its upward trajectory, gaining 5.97% driven by robust AI investment sentiment. Conversely, cocoa reflected the volatility in agricultural commodities, falling 6.17% as fears of supply disruptions materialized, highlighting the fragility of market positions amid oscillating supply and demand fundamentals. U.S. Treasury yields exhibited mixed movements, with short-term rates responding to inflationary pressures while duration curves remained unsettled, underscoring the cautious tone across market participants regarding future Fed policy actions. Overall, the week's events underline a macro environment marked by a tug-of-war between growth and inflation, compounded by geopolitical instability. The evolving landscape indicates heightened scrutiny of market signals, particularly regarding inflation expectations and central bank policy. The tightening liquidity regime, denoted by a composite signal of -2.883 with negative momentum, emphasizes caution, suggesting potential for increased financial market volatility moving forward. Week Ahead: Looking into the next week, pivotal economic releases are anticipated, including Retail Sales and Producer Price Index data. These figures will help clarify the trajectory for consumer spending and inflation, both critical indicators for shaping Fed monetary policy. As markets recalibrate in response to these data points and the persistent geopolitical landscape, investors should remain alert to shifting dynamics that could bring both opportunities and risks across asset classes.

• U.S. Treasury yields broadly increased, with the 5-year yield rising by 4.0 bp (3.40σ), reflecting ongoing inflation concerns amid geopolitical tensions. • Oil prices dropped sharply, with WTI crude decreasing by 3.95% as investors weighed supply disruptions against overall economic concerns related to U.S.-Iran tensions. • The Hang Seng Index surged 2.99% (2.47σ), defying regional trends, driven by positive sentiment in tech and consumer sectors. Recommendations • Consider shorting energy stocks — as crude prices fall amid geopolitical tensions, sector-related equities face further downside risk. • Look at buying tech stocks such as Meta Platforms or Tesla, which are showing resilience amid strong earnings momentum and sector recovery. • Monitor Treasury yields for potential buying opportunities in longer-term bonds, especially with increasing volatility around inflation expectations. In Thursday’s session, U.S. equities showed resilience against a backdrop of rising geopolitical tensions and inflationary pressures. The Nasdaq Composite led the day with a 1.30% gain, fueled by strong performances from mega-cap technology stocks like Meta Platforms, which surged 4.70% amid positive sentiments around AI investments. Meanwhile, the broader tech sector climbed 2.18%, reflecting a revival in risk appetite. Geopolitical developments, particularly news from Iran regarding attacks on U.S. military targets in the Gulf, contributed to volatility, particularly in energy markets as crude oil prices plummeted by over 3.9% (WTI) on concerns about demand destruction. Today's economic calendar included weekly jobless claims that came in at 215,000, slightly below the 218,000 expectation but unchanged from the prior week. This stability in the labor market, combined with ongoing uncertainty in foreign affairs, underpins a mixed outlook for growth. Additionally, the Atlanta Fed's GDPNow estimate currently forecasts a modest growth of 1.26% for Q2 2026, consistent with the prevailing risk tone that’s been characterized by a slowdown in momentum for the broader economy. In fixed income, U.S. Treasury yields nudged higher, with the 5-year yield up 4.0 bp to 4.31%, amid rising inflation expectations influenced by the drop in breakeven rates (5-year breakeven inflation fell 3.0 bp). These movements suggest a market grappling with the implications of potential policy shifts as the Fed continues to navigate stubbornly high inflation—current Fed Funds futures imply a 74.3% probability of a target range of 3.50-3.75% at the next meeting on 30 July, reflecting cautious optimism but also uncertainty regarding future monetary policy. Internationally, the Hang Seng Index displayed remarkable strength, gaining 2.99% despite regional declines across various other indices, related to positive sentiment stemming from rebounds in technology and consumer discretionary stocks, buoyed by potential easing of restrictions on semiconductor exports from China. However, the Nifty 50 index was a significant laggard, falling 2.12%, driven by ongoing political and economic uncertainties in India. The liquidity regime signal indicates that conditions are deteriorating, with a composite score of -2.945 suggesting tighter credit conditions even as acceleration of deterioration is decelerating. This divergence indicates potential caution moving forward. The notable jump in overnight reverse repo usage (+72.45%) suggests a scramble for liquidity amidst elevated uncertainty, possibly due to geopolitical developments and market volatility. Looking forward, market participants should keep an eye on upcoming economic releases, including the French and German CPI reports set for tomorrow, which could further inform inflation expectations and central bank responses. The risk tone remains delicately poised as markets balance strong equity trends against the backdrop of significant geopolitical concerns and tightening liquidity conditions. In conclusion, while risk appetite seems to hold in the tech sector, the overall outlook is cautious, with market participants well aware of potential volatility ahead. As tensions in the Middle East flare, the macro environment continues to present complexities that will require careful navigation.

Market Wrap - July 8, 2026 • Heating oil surged 10.56% (2.98σ) amid escalating tensions in the Middle East affecting oil flows. • The 1-year Treasury yield jumped 11 bp (3.16σ), reflecting heightened rate expectations post-FOMC meeting minutes release. • The Dow Jones Industrial Average declined 1.09% as geopolitical uncertainty weighs on market sentiment. Recommendations • Consider going long on heating oil — recent geopolitical tensions threaten supply, potentially driving prices higher. • Stay short on high-growth tech stocks, particularly Tesla and Meta, as signs of demand weakness are present in their recent performance. • Look for opportunities in municipal bonds with yields rising on short-term treasuries, benefitting from potential inflows as risk sentiment deteriorates. Market sentiment today was heavily influenced by a spike in tensions related to U.S.-Iran relations, which saw oil prices climb significantly. According to Reuters, the situation escalated with the U.S. conducting strikes in southern Iran, leading to fears of potential disruptions in oil supply. The FTSE 100 saw its worst day since May, reflecting broader concerns regarding geopolitical risks impacting market stability. This backdrop led to a general risk-off tone across major indices. The Dow Jones Industrial Average fell 1.09%, while the S&P 500 dipped 0.28%. Notably, mega-cap stocks also struggled, with Tesla dropping 2.19% and Meta falling 2.02%, as investors recalibrated their expectations amid economic uncertainty. The economic calendar featured the release of the FOMC Meeting Minutes, which indicated a cautious stance on future rate hikes, yet the immediate market response included a rise in short-term Treasury yields. The 1-year Treasury yield rose sharply by 11 basis points to 4.06%, reflecting an increased perception of hawkishness surrounding the Fed's policy direction. Furthermore, crude oil inventories reported a drop of 3.8M, reinforcing bullish sentiment on oil prices in light of geopolitical developments. The Atlanta Fed's GDPNow estimate suggested Q2 growth at 1.26%, implying weakness that markets may have been digesting alongside these interest rate inputs. In terms of credit markets, both high yield and investment-grade corporate yields rose, reflecting a widening perception of risk as investors priced in uncertainty. The high yield (junk) yield increased 8 bp to 5.44%, while the investment-grade yield rose similarly by 8 bp to 5.26%. Such developments typically indicate a deterioration in credit market sentiment, aligning with the rising stress gauges. Sector performances further illustrated the risk-off sentiment, as materials and financials were among the laggards, down 2.62% and 1.93%, respectively. In contrast, energy sectors outperformed, gaining 1.76% due to rising oil prices. This highlights a continued bifurcation where capital is flowing towards defensive sectors amid broader market apprehension. The liquidity regime signal reveals deteriorating conditions marked by a composite signal of -3.153 and negative momentum (-2.442). This deterioration in liquidity is becoming evident, tightening credit conditions and influencing investor behavior towards lower risk assets. Despite a deceleration in the decline of this signal, the overall direction remains consistent with a constricted liquidity landscape, which is likely to further amplify market volatility in forthcoming sessions. In cryptocurrency markets, Bitcoin retreated to $61,928 following the adverse news backdrop, aligning with volatility across risk assets. The cryptocurrency landscape continues to react sensitively to macroeconomic signals, with traders cutting risk exposure as inflationary pressures loom amid tightening liquidity. Polymarket data indicates varying probabilities around Fed actions, particularly the outlook for rate adjustments. Current implied probabilities suggest a 70.1% chance of maintaining the target range at 3.50-3.75% in the July meeting. With heightened tension in the Middle East and its impact on oil prices, vigilance over inflation dynamics will be crucial in reshaping rate outlooks. The macro regime remains tagged as "Slowdown / Hot / Hawkish," a designation that reflects current economic growth conditions and persistent inflation concerns. As today's session reinforces the slowdown risk, the interplay of these factors suggests that traders remain watchful for signs of a regime transition amidst conflicting signals on inflation and growth. Outlook As geopolitical tensions continue to impact market dynamics and investor sentiment, caution should govern trades. The current liquidity constraints and rising Treasury yields may signal further volatility across risk assets, especially within the technology and consumer discretionary sectors. With the market positioned around critical earnings reports and further economic data releases ahead, including Thursday's Unemployment Claims, traders should prepare for potential adjustments in strategy based on evolving macroeconomic conditions. Further clarity on Fed monetary policy will be vital in shaping the near-term risk tone.

### Market Wrap for July 7, 2026 • Brent crude oil rallied 5.17% (3.4σ) amidst geopolitical tensions and OPEC+ supply constraints. • Coffee prices fell sharply by 8.61% (4.6σ) as oversupply concerns dampened demand expectations. • Tesla shares tumbled by 4.02% as profit-taking ensued following recent gains and competitive pressures in the EV sector. --- Recommendations • Consider shorting coffee via futures contracts; recent supply signals point to ongoing price pressure. • Long positions in Brent crude futures could capitalize on rising geopolitical tensions affecting supply. • Evaluate utility and renewable energy stocks; the sector has shown resilience despite broader market volatility. --- Market sentiment shifted to a risk-off tone as traders responded to a series of geopolitical events and economic data, driving various asset classes in different directions. Brent crude oil spiked 5.17%, a significant move fueled by rising tensions over Middle East energy supplies as reported by Reuters, following the U.S. suspension of Iranian oil sales licenses. This rally reflects persistent concerns about global supply dynamics, especially with OPEC+'s recent announcements on output strategies. Conversely, coffee prices plunged sharply, down 8.61%, largely due to an excess supply outlook, making it an unusual outlier with a z-score of -4.60. This price action suggests a potential shift in consumer behavior and market expectations surrounding commodities, prompting investors to re-evaluate their positions. The economic calendar featured no significant releases that were particularly impactful (e.g., ADP Weekly Employment Change showed a decline in job additions, historically a major driver for overall market sentiment). However, ongoing readings of non-farm labor data and consumer confidence should be essential for gauging future economic conditions. The Atlanta Fed GDPNOW estimate currently indicates an annualized GDP growth of 1.36% for Q2 2026, reflecting a slowdown, aligned with our macro regime classification of "Slowdown / Hot / Hawkish." This suggests a divergence in the growth outlook, adding to the uncertainty regarding future corporate earnings and stock performance. US Treasury yields demonstrated a mixed picture, with the 3-month yield rising by 5 bps to 3.87% while longer-duration bonds, notably the 5y and 7y Treasuries, fell slightly. The short-term rise indicates market participants are still pricing in near-term risks associated with inflation expectations, evidenced by the modest increase in inflation breakevens (5Y and 10Y breakevens up 1 bp each). Meanwhile, the deterioration in liquidity, indicated by our liquidity regime signal reading of -3.927, reveals tightening conditions with momentum declining (-3.734). This aligns with the observed risk-off tone and reaffirms the cautious approach to taking excessive risks in the current environment. Equities saw significant movements, particularly in tech stocks, which generally struggle during uncertain economic climates. The Nasdaq Composite fell 1.16%, led lower by a 4.02% drop in Tesla shares due to profit-taking and anxiety over competition following Chinese developments in AI chip production affecting the semiconductor sector, as noted by Yahoo. On the upside, Meta Platforms appreciated by 2.55%, showcasing investor enthusiasm for its new AI model release despite the mixed environment for tech equities overall. In the currency markets, the US dollar index climbed by 0.24% to 101.11, reflecting its safe-haven status amidst prevailing risk aversion. Commodity currencies, such as the Australian dollar, fell against the USD, while emerging market currencies remained under pressure with notable weakness in the MSCI Emerging Markets ETF, which declined by 2.74%. Finally, as we look ahead, several upcoming economic releases, including the FOMC meeting minutes and consumer price index data, could serve as critical catalysts that shape market sentiment further. Investors should especially watch for comments related to inflation from the FOMC discussions to gauge future interest rate trajectories—a vital consideration given the current hawkish policy backdrop and emerging inflationary pressures. The macro regime suggests that mixed signals may lead to increased volatility across asset classes as investors grapple with the implications of growth slowing against a backdrop of persistent inflation. In conclusion, the current risk tone remains cautiously risk-off, as markets adjust positions in response to tightening liquidity conditions and geopolitical tensions. The potential for further volatility persists, particularly as we navigate upcoming economic data and market reactions to central bank communications.

• Cocoa surged 15.64% (4.5σ) amid supply disruption fears, underpinning elevated agricultural commodity prices. • Tesla shares climbed 6.69% (2.3σ) as optimism around its expansion strategy buoyed tech sentiment. • The VIX declined 4.70% (-2.0σ), reflecting easing investor concerns and a shift to risk-on sentiment. Recommendations • Consider adding exposure to agricultural commodities, particularly cocoa and coffee, following today's strong performance and supply concerns. • Explore long positions in Tesla as its stock continues to show upward momentum amid strategic expansions. • Monitor volatility trends closely for potential re-entries, especially if the VIX approaches significant support levels. Market sentiment on Monday was markedly risk-on, propelled by strong performances in equity markets and commodities, particularly in agriculture. Major U.S. indices saw upward movements, with the Wilshire 5000 leading the charge as it gained 1.63%. Key stocks like Tesla advanced by 6.69%, fueled by positive sentiment surrounding its strategic business moves, including the reported expansion of its Robotaxi service into Miami, as highlighted by Yahoo. The linkage of these developments to broader equity performance reinforced a bullish outlook for the technology sector, alongside advances in companies like Meta Platforms, which rose by 2.98%. Conversely, Microsoft shares fell after news of significant layoffs within its Xbox division, indicating sector-specific vulnerabilities that could impact broader tech sentiments. The economic calendar showcased mixed signals. Notably, the ISM Services PMI registered at 54.0, below the forecast of 54.2 and down from a previous 54.5, suggesting a slight deceleration in the services sector's growth. This data aligns with the current Atlanta Fed GDPNow estimate of 1.19% growth for Q2 2026, reflecting below-trend economic momentum. Meanwhile, the consumer sentiment index held steady at 44.80, suggesting persistent concerns among consumers despite some equity market optimism. These metrics challenge the current macro regime classification of "Slowdown / Hot / Hawkish" and hint at potential divergence in future data releases. U.S. Treasury yields saw a minor decline, with the 10-year yield inching up to 4.49% (+1 bp), reflecting mixed investor sentiment tied to ongoing inflation concerns amidst the risk-on tone. The yield curve remained relatively stable, signaling uncertainty about future monetary policy but maintaining a slight bullish bias in long-dated bonds. The volatility index (VIX) dropped 4.70%, indicating reduced market concern and a growing appetite for riskier assets, which corresponds with the improved equity market metrics noted today. Across commodities, significant price movement was observed in agriculture, where cocoa jumped 15.64% amid fears of supply disruptions, marking it as one of the most pronounced statistical outliers of the session (z = 4.52σ). Coffee also performed well with a 10.03% increase, driven by similar supply fears. These shifts highlight that commodity markets could benefit from ongoing supply chain concerns, suggesting strategic long positions could be warranted here. While the liquidity regime shows continued deterioration due to tightening macro conditions, today's readings indicate a slowing in that deterioration. The composite liquidity signal remains negative at -3.707, with a momentum reading of -3.899 suggesting liquidity is tightening but at a decelerating rate. This environment can create heightened volatility within credit markets, affecting risk pricing that investors should watch closely. Looking ahead, key upcoming economic releases include the ADP weekly employment change and inflation figures on July 8th, which could serve as crucial indicators for both growth and monetary policy directions. Markets remain poised for reaction based on how these figures align with expectations, with central bank communications and economic indicators feeding into the broader narratives. Overall, while the current risk sentiment has shifted positively, ongoing economic signals present a mixture of optimism and caution, warranting a strategic outlook that accounts for the dynamic nature of market conditions.

WEEKLY REVIEW: 2026-06-29 to 2026-07-03 Key Developments: - Technology Sector Volatility: Tesla's 7.49% decline on disappointing delivery expectations on Thursday highlighted the fragile sentiment in the tech sector. Contrastingly, Meta Platforms surged 8.81% on bullish cloud business news mid-week. - Geopolitical Impacts on Markets: The KOSPI dropped 7.89% by week's end amid escalating regional tensions, particularly affecting South Korean equities and exacerbating existing market anxieties. - Commodity Market Shifts: Coffee prices rose 8.71%, signaling strong demand in commodity markets, while oil values fluctuated as U.S.-Iran negotiations eased supply concerns, ultimately aiding defensive positioning. - End of Week Data Dump: The week culminated with mixed labor market data, triggering varying reactions from equity markets and culminating in a cautious outlook as growth indicators weakened. --- As the first week of July unfolds, market dynamics have oscillated between optimism in technology and pronounced concerns over geopolitical stability. The dominant theme has centered around the volatility in the technology sector, highlighted by Tesla's significant downturn amid disappointing delivery figures, which reverberated through the broader market, particularly impacting risk-on positioning in equities. Conversely, a surge in stocks like Meta Platforms and Apple showcases the dichotomy of tech sentiment where news-driven optimism can swiftly flip to disillusionment, underscoring the fragility of current market conditions. Starting the week on a positive note, Tesla’s robust delivery expectations initially buoyed the tech sector, resulting in an 8.46% surge. However, this exuberance was short-lived as the company ended the week down 7.49%, hitting the brakes on an otherwise ripe market for tech stocks. The volatility in technology shares reflects not only company-specific news but global investor apprehension spurred by geopolitical frictions, particularly in the Asia-Pacific region, as seen in the 5.81% fall of the KOSPI on Monday. With South Korean equities now operating under increased pressure from a confluence of inflationary concerns and regional tensions, the underpinning risk sentiment across markets has shifted from moderately optimistic to cautious. The sharp fluctuations in the VIX, which settled down 14.51% for the week, reflect a market trying to find its footing yet entangled with contrasting narratives in macroeconomic data and corporate announcements. On Tuesday, the midweek reprieve in sentiment prompted further buying in tech stocks, pushing the VIX to breathe lower. Economic indicators, including the JOLTS report showing job openings slightly below expectations, while not yet indicative of a full-blown labor market slowdown, catalyzed a growing collective unease around future Fed policy and growth sustainability. The commodity sphere also saw substantive movement, with coffee prices surging 8.71%, drawing attention towards supply-side dynamics amidst rising inflation fears. This demand resilience has led to a marked shift, with traders pivoting toward agricultural sectors as a hedge against inflationary pressures, underscoring the diversified sentiment within investor risk appetites. However, oil markets illustrated distinct dissonance with falling prices amid easing geopolitical supply concerns, reaffirming the complexity of current market narratives where inflationary pressures contend with growth-related hesitations. Looking closely at economic signals, the week concluded with disheartening labor market data. The Non-Farm Employment Change came in under market expectations, indicating a potential deceleration in the subsequent employment report. In this light, the yield curve reflects a paradigm where 10-year Treasury yields crested around 4.48% as investors reevaluated rate hike trajectories, aligning with an implied probability of 76.5% for maintaining rates in the 3.50%-3.75% range. Investors must intelligently navigate these market waters as monetary policy continues to loom large over the macro landscape. Moving forward, investors should remain vigilant as the broader implications of mixed economic data press into the forthcoming week. Significant catalysts to monitor include the upcoming ISM Manufacturing PMI and ADP Non-Farm Employment Change—both closely watched indicators that could redefine market perceptions of economic strength leading into the tapering of fiscal stimuli and shape expectations for future Federal Reserve action. Additionally, the handling of inflationary pressures amid evolving global economic frameworks will be paramount for strategists ahead. The volatile dance between growth and inflation continues, reinforcing the necessity for adaptive portfolio allocations and prepared management in anticipation of transient market conditions. Week Ahead: - Key U.S. Macro Data: ISM Manufacturing PMI and ADP Non-Farm Employment Change could pivot market expectations toward or away from aggressive Fed action. - Ongoing Regional Tensions: Monitor developments within Asia-Pacific to gauge potential impacts on U.S. equities and commodities. - Technology Earnings Seasons: Pay attention to tech quarterly earnings releases, notably from leading firms such as Apple and Microsoft, which could further clarify growth trajectories amidst prevailing volatility. - Labor & Growth Signals: As the July FOMC meeting approaches, traders should scrutinize employment reports and inflation data closely for potential implications for Fed policy adjustments, currently forecasted by markets but subject to modification based on incoming data. Overall, while optimism may linger in pockets, a thoughtful reassessment of risk exposures, particularly in technology, coupled with a readiness for potential shifts in macroeconomic narratives, represents a prudent roadmap for navigating the markets in the week ahead.

• Tesla shares plummeted 7.49% (z=-2.72σ) amid disappointing delivery expectations, dragging down the tech sector. • The KOSPI dropped 7.89% (z=-3.28σ), reflecting regional concerns around economic stability, particularly affecting South Korean equities. • Apple, however, gained 4.84% (z=+3.08σ), rebounding from recent lows and benefiting from expectations of strong quarterly earnings. Recommendations • Consider reducing exposure to tech stocks like Tesla amid increased volatility and negative sentiment. • Increase positions in consumer staples and healthcare, which displayed resilience and positive momentum during the session. • Watch for opportunities in Apple as strong earnings may drive further upside, leveraging its positive momentum. Today, global markets experienced a mixed tone, fluctuating between risk-off sentiments and pockets of resilience. Tesla's sharp decline of 7.49% highlighted investor concerns following below-expected delivery reports, triggering broader declines in the technology sector, which fell 2.71%. Additionally, the KOSPI, representing South Korea's largest equities, plunged 7.89%, reflecting regional inflation concerns and subdued consumer demand as the economy adjusts post-pandemic. On the other hand, Apple rebounded strongly, gaining 4.84% as investors remained optimistic about its upcoming earnings release, contributing to an overall mixed day for market sentiment. The economic calendar featured mixed data affecting market sentiment. Notably, the June Non-Farm Employment Change came under expectations at 172K versus a forecast of 114K, maintaining the unemployment rate at 4.3%. Initial Jobless Claims printed at 215K, matching estimates, signaling stability in the labor market despite the slowdown. However, traders reacted to the underwhelming growth indicators by weighing risks against Fed rate hike potential, evident in the modest uptick in 10-year Treasury yields, which rose 4 bps to 4.48%. US Treasury yields generally climbed throughout the curve as well, with the 30-year yield increasing 6 bps to 4.97%. The hawkish tone leans on the ongoing liquidity concerns as evidenced by our liquidity regime signal, which reports a deteriorating environment. This is consistent with Fed policy expectations, where markets are pricing in an implied rate probability of at least 76.5% for the Fed's target rate to remain between 3.50-3.75% at the upcoming meeting. Consequently, further yields movements may continue to pressure growth-sensitive sectors. In equities, the Dow Jones made gains of 1.14%, largely buoyed by strength in defensive sectors, particularly healthcare, which rose 2.63%. Conversely, the Nasdaq composite fell 0.80% due to weakness in mega-cap tech stocks, including a noticeable downturn from Tesla and Meta Platforms, which dropped 4.90% on continued concerns over valuation and growth expectations. Tesla's sharp fall serves as a troubling signal for investors looking to navigate the still-expanding tech landscape, suggesting the sector may face increased headwinds as cost concerns rise. Meanwhile, in the commodities space, oil prices rose marginally by 1.01% amid short-covering buys tied to the recent geopolitical developments involving Iran and global supply dynamics. Conversely, gasoline dropped sharply by 5.60%, suggesting demand concerns are surfacing as part of a broader slowdown narrative. Precious metals, in contrast, saw a rally with silver jumping 5.39% as investors sought safety from inflationary pressures while crypto markets continued their resurgence, with Ethereum and Cardano gaining 8.09% and 14.63% respectively, supported by positive labor market signals that may contribute to less aggressive Fed tightening. With market liquidity deteriorating and the liquidity regime signal also declining, while signs of a potential recovery in unemployment claims offer a mix of headwinds and tailwinds, we expect volatility to stabilize in the near term. Nonetheless, investors should carefully monitor upcoming earnings reports and economic indicators that may further dictate the market direction. Moving forward, notable catalysts to watch include tomorrow's Bank Holiday in the US and subsequent labor market forecasts as the Federal Reserve continues its balancing act between economic support and inflation control, which shapes the overall macro regime classification of a "Slowdown / Hot / Hawkish."

• Meta Platforms surged 8.81% (3.99σ) on a report of a new cloud business plan, driving tech sentiment. • The overnight reverse repo usage plummeted by 96.28%, indicating reduced stress in the financial system. • Brent and Crude Oil dropped 3.04% and 2.77%, respectively, as US-Iran negotiations ease supply concerns. Recommendations • Consider adding positions in technology equities, particularly in Meta, due to its strong positive momentum and news-driven confidence. • Monitor treasury markets for potential duration trades, as yields remain volatile, with the 20-year treasury yield up 7 bp indicating rate trajectory uncertainty. • Evaluate opportunities in the crude oil sector, particularly in integrated energy companies, due to falling prices and robust earnings potential in the longer term. Today’s market session revealed a notable divergence in sentiment, where the undercurrents of mixed macroeconomic data and significant corporate announcements shaped the financial landscape. Meta Platforms led the tech sector with an impressive gain of 8.81%, buoyed by speculation surrounding its plans to enter a cloud market, a move noted by Yahoo. This resurgence in tech sentiment was significant, particularly as technology shares were generally pressured earlier in the session, contributing to an overall risk-on tone that saw broader market indices mixed. Notably, the Nasdaq composite fell 0.66%, reflecting a struggle to sustain upward momentum in the face of broader market uncertainties. The economic calendar showed that while factory activity indicators are proving resilient, the ISM Manufacturing PMI for June flashed a reading of 53.5, marginally lower than the previous 54.0, underscoring a gradual decline in manufacturing momentum. This aligns with the Atlanta Fed's GDPNow estimate which currently predicts Q2 growth at 1.19%, suggesting that economic expansion remains sluggish. Despite anticipated robustness, this lack of a strong uptick in manufacturing could affect market sentiment and policy expectations as the Federal Reserve contemplates tightly managing inflation. The upcoming jobs report, scheduled for July 2nd, will be crucial in determining market direction as it could pivot expectations for monetary policy adjustments. US Treasury yields shifted higher across the curve, with the 20-year yield leading at 4.93% (up 7 bp) and reflecting persistent concerns regarding future rate stabilization. The Fed funds futures market now implies a 71.1% probability of rates staying in the 3.50–3.75% range for the upcoming meeting on July 30. This underscores a cautious approach from markets regarding any potential hikes amid this economic slowdown. Notably, credit spreads also widened marginally as high-yield yields ticked higher by 8 bps, illustrating increased caution among investors about the credit backdrop, even as the high-yield option-adjusted spreads tightened slightly. Equity performance across sectors showed a split view; aside from the strength in communications (up 2.44%), the technology sector lagged, decreasing by 2.57%, partially attributable to profit wins from firms like Microsoft and Apple, whose stock priced in 3.02% and 1.73% gains, respectively. The mixed earnings sentiment underpinned hesitation among investors, reflected in the decreasing volatility with the VIX down to 16.45. This indicates a potential lull in fear across the markets but could also flag a complacent climate that may need vigilant monitoring. In commodities, crude oil prices slid significantly—WTI fell 2.77% while Brent dropped 3.04%—as geopolitical negotiations surrounding Iran’ stance softened supply concerns. This dynamic presents opportunities within the energy sector, particularly in light of robust long-term demand fundamentals. However, the declines compound existing issues within commodity markets, demanding investor caution. Corn and cotton exhibited substantial upward movements of 1.49% and 1.77%, respectively, reflecting unusual demand pressures driving market corrections. The unusual moves from both corn and cotton alert investors to potential supply issues which can ripple across the farming and agricultural sector. As we observe movements in cryptocurrency, Bitcoin recorded its first advance in July, climbing by 3.84% to over $60,000, reflecting bullish trader sentiment possibly catalyzed by a perceived near-bottom formation. This swing aligned with broader technological optimism, especially following supportive regulatory insights, and could point to reshifting perspectives among institutional players surrounding crypto investment environments. Overall, the liquidity regime signal indicates liquidity conditions are deteriorating, consistent with the less favorable macroeconomic backdrop characterized by slowing growth and pressures on corporate profits. This alignment with today’s overall market performance reflects a cautious yet opportunistic tone as we proceed into the employment data release next week, a critical juncture that could reframe market expectations sharply.