Global Rates
US payrolls (July)
-23K
vs +83K consensus; 103K revised away from May/June — the global front-end trigger
US 2Y / 10Y
4.2% / 4.64%
Front end leads the rally; the belly lags because term premium is re-arming
Brent crude
$84.39
+1% today; Iran attaches five preconditions to any Hormuz reopening
BoJ Sep (missed)
42.5c
Up from 40c — a softer dollar makes a Japanese hike easier, not harder
ECB Sep (non-trade)
82.5c
Down from 86.5c; still a closed chapter, still not a chase
Book
+$97.84
5 open, $332 staked; +$611.08 realized, 11/14
The synchronized unwind broke in two over the weekend, and the split is the story. The labour leg went one way: US July payrolls contracted by 23,000 against an +83,000 consensus, with 103,000 stripped out of May and June, and every developed front end followed — the US 2-year fell to about 4.2%, the 10-year to 4.641%, and Polymarket's September Fed-hike odds collapsed from 44.5c to 34.5c. The energy leg went the other way today: Iran told Washington the Strait of Hormuz reopens only once the US ends its strikes on Iran and its regional allies, lifts the port blockade, withdraws forces from around Iran, releases frozen assets and pays war compensation. Tehran and Muscat say the shipping-lane talks are in their final stages, but final stages with five preconditions attached is not a reopening. Brent is back at $84.39 and WTI at $78.77, both up about 1% today after losing more than 7% last week. So the developed curves now have a dovish front end and a re-arming term premium at the same time, which is exactly the configuration our biggest position is built for — and exactly the one we talked ourselves out of last Thursday. We are correcting that publicly today: pos-017's fair value goes back up from 55 to 65, computed as a barrier problem rather than argued as a narrative. Around the block, the two watchlist entries finally moved. The BoJ September hike we missed in early August has firmed to 42.5c from 40c — a soft US payroll print weakens the dollar and makes a Japanese hike easier, not harder, which is the opposite of the intuition most people carry. The ECB September hike eased to 82.5c from 86.5c. Both remain closed chapters: we do not chase what we missed and we do not re-enter what repriced away from us. No global trade. Wednesday's US CPI is the hinge for every curve on this page, and our own screen of the 3.4% bracket came out at a 5.5pp edge against a 10pp bar — a near-miss we are publishing rather than a trade we are taking.
Today's Market Moves
Global long-end complex
0%→0%0pp
The three-session synchronized unwind has ended and been replaced by a split: dovish front ends, re-arming term premium. Iran's five preconditions for reopening Hormuz — end strikes, lift the blockade, withdraw forces, unfreeze assets, pay compensation — put Brent back above $84 after a -7% week. Duration rallies driven by a labour shock and duration selloffs driven by an energy shock can happen in the same week, and did.
10Y Touches 4.8% (pos-017)
52.5%→62.5%+10pp
Correction issued against ourselves. Thursday's FV cut 62 → 55 was narrative reasoning. Recomputed as a barrier: 4.64% touching 4.80% once in ~100 sessions at ~4bp daily vol gives ~69%, haircut to 65 for the dovish drift. FV 65, not 55. The re-armed energy leg is precisely the second engine we had written off. No add — the ask is 66 on $25 of daily volume.
BoJ September hike (missed)
40%→42.5%+2.5pp
First real move in a fortnight, and in the counterintuitive direction: a weak US payroll print weakens the dollar, which relieves the imported-inflation pressure Tokyo has been managing and makes a September hike politically easier, not harder. We missed this trade on Aug 3 for lack of event-day coverage and we are not chasing it at 42.5c. Watch only, or a sub-30c pullback.
ECB September hike (non-trade)
86.5%→82.5%-4pp
Eased 4 points as the global front-end rally spread to euro rates. This is the market that flipped 16c → 87.5c inside a fortnight in July while we watched, and it remains our cleanest illustration that the 10pp bar cuts both ways: it kept us out of a bad entry and out of a good one.
Fed Sep Hike (global driver)
44.5%→34.5%-10pp
The single number driving every G10 front end today. CME FedWatch verified at ~44% on Friday against Polymarket's 34.5c — a 9.5pp gap, under our bar, and it would be a fifth correlated hawkish ticket. The Aug 6 refusal to buy this at 44.5c on an unverified signal is worth about 10 points and is the receipt for the verification rule.
Screening Table
| # | Market | Expiry | Market Price | Fair Value | Gap (pp) | Direction | Volume | Confidence |
|---|---|---|---|---|---|---|---|---|
| 1 | 10Y Touches 4.8% Before 2027 | Dec 31 | 62.5% | 65% | +2.5pp | HOLD $25 YES — FV corrected 55 → 65 | $$25/24h | 6/10 |
| 2 | BoJ September hike | Sep 18 | 42.5% | 42% | 0pp | NO TRADE — missed trade, not chased | $$0.9K/day | 4/10 |
| 3 | ECB September hike | Sep 10 | 82.5% | 82% | 0pp | NO TRADE — closed chapter | $$1.6K/day | 4/10 |
| 4 | Fed Sep Hike | Sep 16 | 34.5% | 44% | +9.5pp | NO TRADE — under 10pp bar; correlation cap | $$193K/day | 4/10 |
| 5 | July US CPI YoY = 3.4% | Aug 12 | 37.5% | 43% | +5.5pp | NO TRADE — 5.5pp under the bar | $$6.2K/day | 4/10 |
Top 5 Opportunities
1
10Y Treasury Touches 4.8% Before 2027 — YES
↑ BUY YES+2.5pp
Market price
62.5%
Fair value
65%
Gap: +2.5pp
The global read on this position is cleaner than the domestic one. We bought it in July as a two-engine bet — war premium plus rate premium — and on Thursday we declared both engines dead and cut fair value to 55. Today Iran published five preconditions for reopening Hormuz and Brent went straight back above $84. The energy engine was never dead; it was between sessions. And the rate engine does not need to run for this to pay, because this is a barrier bet: the 10-year has to TOUCH 4.80% once before December, not sit there. From 4.64%, with roughly 100 sessions and 10Y daily vol near 4bp, that is a ~69% event on diffusion alone, and we haircut it to 65 for the dovish front-end drift. Fair value 65, market 62.5 mid, and no add because the ask is 66 on $25 of 24-hour volume.
▵ Bull case
- Barrier, not level — 16bp touched once over five months
- Iran's five Hormuz preconditions re-armed the energy engine we had written off
- Global term premium is rebuilding even as front ends rally
▿ Bear case
- Our own FV has moved 72 → 62 → 55 → 65 in three weeks
- A dovish Fed drags the whole developed curve lower
- 59 bid / 66 ask on $25 daily volume — the mid is notional
2
BoJ September Hike (missed trade — watchlist) — YES
↑ BUY YES0pp
Market price
42.5%
Fair value
42%
Gap: 0pp
It finally moved, and in the direction people find counterintuitive. A contracting US payroll print weakens the dollar; a weaker dollar relieves the imported-cost pressure that has been the awkward part of Japan's inflation, and that makes a September hike easier for the BoJ to justify, not harder. Up 2.5 points to 42.5c. We flagged this trade on Aug 3, our own thesis called it, and we missed it for lack of event-day coverage — which is the same failure mode as missing Friday. We keep it on the page as a standing reminder rather than as a position, and at fair value there is nothing to chase.
▵ Bull case
- Softer dollar eases the imported-inflation constraint on Tokyo
- Our Aug 3 thesis still reads correctly
▿ Bear case
- We missed the entry; chasing at 42.5c is buying our own regret
- At fair value — no edge
- Thin at $0.9K/day
3
ECB September Hike (non-trade) — YES
↑ BUY YES0pp
Market price
82.5%
Fair value
82%
Gap: 0pp
Eased 4 points to 82.5c as the front-end rally crossed the Atlantic. This is still the cleanest teaching example on the site: in July it went from 16c to 87.5c in under a fortnight while we watched, because our 10pp bar had nothing to say until the move was over. The bar keeps us out of bad trades and out of good ones with equal indifference, and we would rather own that trade-off in public than quietly widen the rule after the fact.
▵ Bull case
- Euro-area core still sticky; September is close to fully priced
- Deep enough to trade if a real gap opened
▿ Bear case
- At fair value with three days of drift, not a dislocation
- Closed chapter — re-entering repriced markets is how books get sloppy
4
Fed September Hike (global driver — not traded) — YES
↑ BUY YES+9.5pp
Market price
34.5%
Fair value
44%
Gap: +9.5pp
On Thursday we refused this trade because a summary put CME FedWatch near 57% and we could not verify it at source in that session. Our rule is that verification and flag belong to the same session. The refusal is now worth about 10 points: the market has fallen from 44.5c to 34.5c, and buying hike exposure the day before a -23,000 payroll print would have been an expensive way to be diligent-adjacent. Today the FedWatch number does verify — around 44% on Friday, per CME's own gauge as reported after the print — which puts the gap at 9.5pp. That is under our 10pp bar, and it would still be a fifth correlated hawkish ticket in a five-position book. No trade, for better reasons than last time.
▵ Bull case
- Verified 9.5pp gap in a $193K/day market
- Same convergence structure as pos-015, the book's fastest win
▿ Bear case
- 9.5pp is under the published 10pp bar — mechanically a no
- Fifth correlated hawkish-Fed ticket; the correlation cap binds
- CPI Wednesday can move it 10 points in either direction
5
US July CPI YoY = 3.4% (candidate — not traded) — YES
↑ BUY YES+5.5pp
Market price
37.5%
Fair value
43%
Gap: +5.5pp
The global relevance is that Wednesday's US print sets the tone for every curve on this page. The bet itself does not clear. Cleveland's nowcast reads 3.42% year-over-year — verified on the source page in this session — and consensus is 3.4%, while the crowd's favourite bracket is 3.3% at 39.5c against 3.4% at 37.5c. Model and street pointing at a bracket the crowd ranks second is our favourite structure, but our fair value comes out near 43 because 3.42 sits close to the 3.45 rounding boundary and because in June this same model missed by 0.42pp and cost us the full $75. A 5.5pp edge against a 10pp bar is a no.
▵ Bull case
- Nowcast and consensus agree at 3.4; crowd's mode is elsewhere
- Liquid enough to size
▿ Bear case
- 5.5pp under the 10pp bar
- 3.42 is close to the 3.45 boundary — the 3.5 bin is live
- June's 0.42pp miss on this model cost $75