Introduction 1. Further rate hikes remain firmly in play. CME FedWatch puts the chance of another October hike at 57.6%. The popular “dovish hike” narrative misreads the policy signal. If October payrolls remain strong, three hikes this year become a credible outcome. Volatility would rise accordingly. 2. The dollar may be entering a faster leg higher. September’s rate hike marked a turning point in the dollar cycle. Because rate differentials now drive the trend, commodity longs face a difficult backdrop. 3. US stocks remain strong, but beware the "last hurrah". Avoid excessive bullishness before the midterm elections. The Dow and Russell peaked in August, so October is the next window for a possible top in the Nasdaq and S&P 500. Limit exposure to tactical trades
U.S.-Iran Swings From Ceasefire Rumors to Live Fire; Brent Briefly Tops $90?
The Middle East flipped in a week. On August 30 U.S. forces struck two IRGC sites on Iran's Larak Island — the first direct action in over a month — and Iran hit U.S. bases in return, promising more. Days earlier the market had been trading a ceasefire framework, including free passage through Hormuz, that was never officially confirmed. Brent briefly cleared $90 and sits near $90.50, WTI +2.43% to $85.43. Energy equities have priced none of it: XLE closed Friday +0.63%, before the strike. Hedge through energy names, or watch Hormuz transit first?
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