Insights 
VT 
The Kansas Fed Manufacturing Activity index rose to 5 in June, up from -10 in the previous month. This marks a noticeable improvement in manufacturing activity within the region.
EUR/USD consolidates near 1.1700 amid US Dollar weakness, with focus on ECB and US data. In the currency market, GBP/USD trades above 1.3700, approaching multi-year highs against a weakened US Dollar.
Gold is trading with a mild positive bias, though it remains under $3,350. Factors impacting gold include concerns over Federal Reserve independence due to potential changes in leadership.
Bitcoin Cash Momentum
Bitcoin Cash exhibits bullish momentum with a 2% increase, targeting a 52-week high at the $500 level. It follows a 6.39% surge the previous day and trades in a parallel channel pattern.
Tensions increase around the Strait of Hormuz due to the Israel-Iran conflict, raising concerns about potential disruptions in oil supply. This narrow sea passage is critical for global oil transport, influencing market volatility.
The Kansas City Fed’s Manufacturing Activity index bouncing back into positive territory offers a clearer message than the choppiness we’ve seen in some national-level data lately. From a low of -10, now standing at 5, the latest print suggests demand conditions in the central U.S. region are stabilising. That’s not just a rebound—it implies that firms are likely regaining confidence, possibly lifting their forward-looking expectations as well. It may act as an early signal that broader industrial sentiment is quietly improving beneath the radar. For short-dated interest rate market participants, regional strength like this could lead to repricing, especially if backed by firm employment components or stronger input cost pressures in upcoming releases.
In currency markets, the EUR/USD pair holding near 1.1700 appears tied tightly to a softening Dollar tone, rather than any sustained euro demand. With DXY unable to hold gains lately, traders have pivoted back toward currencies that offer a mix of policy potential and macro resilience.
Currency Market Focus
The real focus, however, sits with incoming data and whether divergence expectations will build or fade—especially if inflation data in Europe surfaces unexpected persistence. The sterling’s climb above 1.3700 tells a related story. Buyers are following short-term broad-Dollar softness but have also responded to stronger-than-expected service sector demand. Forward rates may not be pricing full commitment yet, but with inflation expectations slightly elevated relative to peers, pricing models could recalibrate quickly on any upward economic surprise.
In precious metals, gold continues to test upside ambitions but has yet to overcome longer-term resistance under $3,350. Price behaviour remains rangebound, but sentiment appears slightly tilted in favour of bulls. The hesitancy is in part political—questions about central bank reliability have slowed institutional flows into bullion. If concerns about the Fed’s ability to act without constraint persist, allocation models that hadn’t previously included gold could begin to adjust. In options markets, we’ve already seen some positioning shift toward longer-date calls, reflecting possible consideration of portfolio hedges tied to fiscal authority pressures.
Meanwhile, Bitcoin Cash extended its rally, riding a technical move supported by positive momentum from a 6.39% jump the session prior. Trading within a parallel channel and moving toward the $500 barrier, the structure indicates the rally could have further room—assuming broader risk appetite holds. From a volatility standpoint, implied readings have also climbed, though not alarmingly, suggesting traders are leaning towards continuation rather than correction. The resistance levels ahead are clear, but momentum-based strategies may favour breakouts in the short term if volume aligns.
Geopolitical developments in the Strait of Hormuz are starting to reassert pressure on energy pricing models. Concerns are mounting that disruptions could stifle flows through the chokepoint, which handles close to a fifth of global oil. Tensions linked to the Israel-Iran conflict are escalating, and futures contracts have started to show a tighter backwardation curve as supply fears blend with rising risk premia. This creates knock-on effects for inflation assumptions and duration pricing, which tend to ripple across commodity-leveraged currencies and rate expectations. Some traders have already pivoted toward tail-risk hedges in crude derivatives—insurance, essentially, against a worse outcome being priced in.
In the weeks ahead, we expect volatility in macro-sensitive assets to remain elevated. Directionality may follow data inflections and policy-related headlines, but positioning across leveraged asset classes could begin to lean more heavily into directional bets. As such, the probability of outsized short-term moves rises. Pricing risk isn’t just about picking a side; it’s increasingly about selecting the right timing mechanism.
