Global Rates

De-escalation is the new global variable. President Trump called off planned strikes and opened fresh talks with Iran, and the risk complex unwound in one session: oil fell more than 5% toward $80, the US 10-year dropped ~7bp to 4.676%, the yen strengthened, and havens gave back their war bid across the board. For a book (and a world) that spent three weeks pricing an escalating Hormuz premium, this is the mirror image — and it's a useful stress test of which positions were built on the war and which on structure. Our US 10Y-touch position, deliberately designed with two independent engines, barely moved (-2c) because the Fed engine — two 2026 hikes still priced, September at 54.5% — carries it even as the war engine pauses. The genuinely remarkable global development, though, is one we only ever watched: the ECB September hike market, frozen near 16c for six weeks, has flipped to 87.5% pricing a hike. Somewhere in the last fortnight the euro-area inflation picture (or ECB communication) changed decisively, and the market that ignored oil, a shipping toll and a flash CPI finally repriced 70 points in one direction. We leaned the wrong way (we thought 16c was rich on a no-hike view) — and it cost us exactly nothing, because a sub-threshold edge never became a position. That is the entire argument for the 10pp bar, written in someone else's ink. Japan: the post-hawkish-hold yen firmed further on the risk-off unwind; the September BoJ hike we missed sits at 39.5c, no chase. Book unchanged at 5 positions, $332 staked, +$611 realized. NFP Friday is the week's hinge — and from now on the book runs on a schedule so it's present when the data lands.