Daily Macro US
ADP (July)
+44K
Less than half June's revised +95K — the softest private-payroll read since spring
10Y Treasury
~4.62%
Fourth session lower; pos-017 touch ~18bp away, FV cut 62→55
Fed Sep Hike
44.5%
Down from 47.5 — third straight slide; NFP tomorrow is the fork
WTI crude
~$75
-11% in three sessions on the Iran–Oman Hormuz route deal
July CPI nowcast
3.42% YoY
Cleveland, Aug 5. Market's 3.4% bracket at 44.5c — no gap, no trade
Book
+$100.2
Cooling with the hawkish complex; +$611.08 realized, 11/14, 5 open
ADP printed 44,000 private jobs for July — less than half of June's revised 95,000, and the softest read since the spring. That is the day's most important number, and it landed after yesterday's daily went out, so it gets the lead today. Layered on top: Iran and Oman agreed a proposed shipping route through the Strait of Hormuz, WTI has lost roughly 11% in three sessions to about $75 and Brent closed above $79, the 10-year sits at ~4.62%, and Polymarket's September Fed-hike odds slid again to 44.5c from 47.5 yesterday. ISM Services at 54.1 (from 54.0) was the one number that didn't cooperate with the dovish story, and equities split the difference — Dow to a record close (+263pts), S&P -0.17%, Nasdaq -0.83%. The book took the hit where you'd expect: pos-017 (10Y touches 4.80) fell another 4 points to 52.5c and we cut its fair value again, 62 → 55. That is two FV cuts in two days on the same position, and we'd rather say it plainly than pretend the July thesis is intact: the war engine is off and the rate engine is idling. It is still +$54.6 on a $25 ticket and nowhere near its published exit (which needs the 10-year below 4.25 — it's 4.62), so we hold, but the honest read is that this is now close to a coin flip. Everything else behaved: the hike runner is unchanged at 62.5c, the 4.0% satellite firmed to 36.4c, and pos-013 (zero cuts) eased a point to 87.55c — still the quiet argument that a dovish drift is not an easing cycle. Two candidate trades were screened and both refused. July CPI: Cleveland's nowcast reads 3.42% year-over-year, and the 3.4% bracket already trades at 44.5c — the crowd is sitting exactly on the model, so there is no gap to buy, and after June (where that same model missed by 0.42pp and cost us $75) we are not paying for its mode again. Fed September hike: one aggregator summary put CME FedWatch near 57% against Polymarket's 44.5c, which would be a 12-point gap and would clear our bar. We could not verify that number on the source page in this run — the live table didn't render — so we are flagging it as unverified and NOT trading it. Our own rule says verification belongs to the same session as the flag, and a trade we can't source is a trade we don't take. It would also have been a fifth hawkish-Fed ticket the day before the print that decides it. One process note in the interest of full disclosure: this run fired around 10:00 CET rather than the scheduled 14:40, so all prices here are a pre-US-open read and today's US claims data was not yet out. Tomorrow's NFP (consensus +120K, unemployment expected to tick up to 4.3%) remains the decider, and the book will be present for it. Book: 5 open, $332 staked, +$100.2 unrealized, +$611.08 realized, 11/14.
Today's Market Moves
10Y Touches 4.8% (pos-017)
56.5%→52.5%-4pp
Second consecutive FV cut: 62 → 55. Soft ADP + cheaper oil + a Hormuz route deal have taken the last of the war premium out and most of the rate premium with it. Still +$54.6 and far from the 10Y<4.25 exit gate, so we hold — but we are calling it what it is: a near coin flip with NFP as the fork, not the two-engine bet we bought in July.
Fed Sep Hike (context)
47.5%→44.5%-3pp
Third straight session lower on the ADP miss. An unverified aggregator read put FedWatch near 57% — a 12pp gap that would clear our bar. Unverified means untraded. If it verifies after NFP, it becomes a real candidate.
Fed Rate Hike 2026 (runner)
62.5%→62.5%0pp
Unchanged despite the ADP miss — the 2026 window is wider than September alone, and Oct/Dec keep it alive. Trim 72c, floor 48c, both untouched. Half already banked at 66.5c, so this is house money.
Zero Fed Cuts 2026 (pos-013)
88.7%→87.55%-1pp
Eased a point on the soft ADP — the first time in weeks it has moved at all. Still the anchor: a 44K print is a slowdown, not a recession, and this Fed had three hike-dissenters in July. Efficiency trim stays armed at 90c.
Fed Funds End 2026 = 4.0% (pos-011)
34.3%→36.35%+2pp
Firmed 2 points even as hike odds fell — consistent, actually: softer data shifts probability from two hikes toward exactly one, which is this bracket. Now +$1.7, first time above cost.
Screening Table
| # | Market | Expiry | Market Price | Fair Value | Gap (pp) | Direction | Volume | Confidence |
|---|---|---|---|---|---|---|---|---|
| 1 | 10Y Touches 4.8% Before 2027 | Dec 31 | 52.5% | 55% | +2pp | HOLD $25 YES — FV cut 62→55; NFP is the fork | $$245K | 5/10 |
| 2 | Zero Fed Cuts 2026 | Dec 31 | 87.55% | 90% | +2pp | HOLD YES — trim at 90c | $$19K/day | 7/10 |
| 3 | Fed Sep Hike (candidate) | Sep 16 | 44.5% | 0% | 0pp | NO TRADE — FedWatch gap unverified in this run | $$372K/day | 3/10 |
| 4 | July CPI YoY = 3.4% | Aug 12 | 44.5% | 45% | 0pp | NO TRADE — crowd sits on the nowcast; June lesson kept | $$3.6K/day | 4/10 |
| 5 | Fed Rate Hike 2026 (runner) | Dec 2026 | 62.5% | 62% | 0pp | HOLD $100 — trim >72c, floor 48c | $$19K/day | 6/10 |
Market vs Fundamentals
Market Price (red) vs Estimated Fair Value (green) — %
Top 5 Opportunities
1
10Y Treasury Touches 4.8% Before 2027 — YES
↑ BUY YES+2pp
Market price
52.5%
Fair value
55%
Gap: +2pp
We bought this in July as a dual-engine bet: war premium plus rate premium. Both engines are now off or idling — the Iran–Oman route deal took oil down 11% in three sessions, and a 44K ADP print took another 3 points out of September hike odds. We have cut fair value two days running (72 → 62 → 55) and the edge is now 2.5pp, which is inside the noise. We hold because the position is still positive-EV, still +$54.6 on a $25 ticket, and nowhere near the exit we published (10Y below 4.25; it is 4.62). But we are not going to dress this up: it is close to a coin flip and tomorrow's payroll decides which side of the flip it lands on.
▵ Bull case
- One hot NFP re-arms it in a single print — 18bp is not far
- Two 2026 hikes are still partly priced; the issuance calendar hasn't changed
- Far from any published exit trigger
▿ Bear case
- Both engines soft — second FV cut in two sessions
- A soft NFP likely caps the summer's yield path outright
- Edge down to 2.5pp, inside the noise band
2
Zero Fed Cuts 2026 — YES
↑ BUY YES+2pp
Market price
87.55%
Fair value
90%
Gap: +2pp
It finally moved — down a point on the ADP miss — and that small move is informative. A 44K private-payroll print is enough to shave a hike, not enough to buy a cut, which is exactly the distinction this position is built on. With three FOMC hike-dissenters in July, a 2026 cut requires an actual recession, and Polymarket's own recession market prices 8.5c. The only live decision remains the 90c efficiency trim.
▵ Bull case
- A slowdown is not a recession; recession market at 8.5c agrees
- Three July hike-dissenters make a cut a tail event
- Anchor position — lowest-variance carry in the book
▿ Bear case
- First downtick in weeks — soft data does chip at it
- 2.4pp edge; capital could work harder elsewhere
- A shock-weak NFP starts genuine cut chatter
3
Fed September Hike (candidate — not traded) — YES
↑ BUY YES0pp
Market price
44.5%
Fair value
0%
Gap: 0pp
The most interesting thing we did today was not take a trade. A search summary put CME FedWatch's September hike probability near 57% against Polymarket's 44.5c — a 12-point gap, above our 10pp bar, and structurally identical to pos-015, the fastest win this book has had. We went to the source to confirm it and the live probability table did not render. Our published rule is that verification belongs to the same session as the flag, so an unverified number is not a tradeable number. Two other reasons to be glad about that: it would have been a fifth hawkish-Fed ticket in a five-position book that is already one macro bet with several receipts, and it would have been bought the day before the print that decides it. If the gap survives NFP and verifies, it is a real candidate on Monday.
▵ Bull case
- Convergence structure that worked before (pos-015, +68% in 22 hours)
- Deep liquidity — $372K/day, easy to size
▿ Bear case
- Source unverified in this session — disqualifying on its own
- Fifth correlated hawkish ticket; correlation cap says no
- Entering the day before NFP is a coin flip, not an edge
4
Fed Funds Rate End 2026 = 4.0% — YES
↑ BUY YES0pp
Market price
36.35%
Fair value
36%
Gap: 0pp
The single-hike satellite firmed 2 points to 36.4c and is above cost for the first time — +$1.7. Counterintuitive on a day hike odds fell, but coherent: soft data moves probability out of the two-hike tail and into exactly one hike, which is this bracket. At fair value, nothing to do.
▵ Bull case
- Softer data concentrates the distribution on a single 2026 hike
- Above cost for the first time since entry
▿ Bear case
- At FV — no edge to act on
- Thin volume; hard to exit in size
5
US Unemployment ≥5.0% (held NO) — NO
↓ SELL YES0pp
Market price
10.15%
Fair value
10%
Gap: 0pp
YES ticked up to 10.15c on the ADP miss — the market pricing a slightly fatter labour-market tail, which is reasonable. We hold NO at +$19.8. Consensus has tomorrow's unemployment rate rising to 4.3% from 4.2%; getting from there to 5.0% inside five months needs a genuine recession, not a soft month. Our early-exit review triggers below 8c and we are above it, so no action.
▵ Bull case
- 4.3% to 5.0% in five months requires a recession, not a slowdown
- Recession market prices 8.5c — consistent
▿ Bear case
- Ticked the wrong way on soft data
- Long carry to December for the remaining ~$10