Written Commentary
MACRO FRAME
Global equities opened mixed Monday as AI-sector concerns persisted and European political unrest intensified. S&P 500 futures gained 0.46%, Japan’s Nikkei fell 0.62%, and South Korea’s KOSPI surged 1.76%, supported by KRW 575 billion in institutional buying. European shares declined 0.8% as French 10-year yields approached 4.9% amid widespread protests. China’s third-quarter GDP accelerated to 4.5%, exceeding 4.4% expectations, while September industrial production increased 5.5%.
STOCK INDEX FUTURES
S&P 500 futures are recovering as declining oil prices and Treasury yields provide relief following last week’s technology-led selloff. December S&P 500 futures gained approximately 0.5% toward 7,743, while Nasdaq 100 futures advanced nearly 1.1%. Still, market evidence remains mixed. The S&P 500 declined 1.95% last week, compared with a 4.48% Nasdaq Composite loss, highlighting the disproportionate pressure on technology shares. CoreWeave plunged 25% as investors questioned the sustainability of debt-financed AI expansion. Nevertheless, healthcare and consumer staples demonstrated relative strength, suggesting rotation rather than indiscriminate liquidation. Market breadth also confirms the rotation.
CURRENCIES
US DOLLAR:
The U.S. Dollar Index recovered toward 101.90, supported by renewed euro weakness despite declining Treasury yields. Friday’s CFTC report showed speculative dollar longs against eight major currencies, increasing 27% to $44.6 billion, an 11-week high. The $37 billion increase over four weeks signals increasingly crowded positioning and greater vulnerability to a dollar reversal.
EURODOLLAR:
Euro futures weakened toward 1.1200 as political unrest intensified in France.
TREASURY FUTURES
U.S. Treasury bond futures are extending their recovery. Falling crude oil prices, reduced rate hike expectations, and a rotation out of corporate bonds to US Treasuries support demand for longer-duration notes and bonds. The 30Y Treasury yield declined toward 5.40% after a 17 basis-point retreat last week. Brent crude fell nearly 2% toward $107–$108 per barrel, easing immediate inflation concerns. However, September CPI and PPI reinforced persistent price pressures, leaving the fundamental case for a sustained bond rally uncertain.
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