Global Markets | Mon Jun 29, 2026

Analysis

• The Fed has flipped from cut-watch to hike-watch, and the dollar is now the single rail dragging every non-yielding asset down at once. New chair Kevin Warsh is reshaping the Fed around "regime change," and futures price a 64% chance of a rate hike by September — enough to push the dollar toward its best month in nearly a year, gold to a fourth straight monthly loss, Bitcoin back to $60,000 on $1.8 billion of weekly ETF outflows, the yen to a 40-year low near ¥162, and the won to a post-2009 high past ₩1,545 simultaneously. This is one discount-rate force repricing FX, duration, crypto and EM at the same time, not a rotation between them.
• The AI-capex cycle and the AI-leverage unwind are now pulling in opposite directions, and East Asia is where both land hardest. Korea's government unveiled a $518 billion chip megaproject that sent the Kosdaq up more than 8% — its second-largest gain on record — even as the KOSPI finished flat and foreigners dumped a record ₩7.7 trillion of stock; East Asia swept the first-half global leaderboard (KOSPI +66%, TAIEX +42%, Nikkei +36%) on the memory-chip boom. Against that, the BIS warned the $1 trillion AI investment boom rhymes with the canal, railway and dot-com bubbles that all ended in recession — the bull case and the bubble case now share the same names.
• The war premium keeps failing to stick in crude even as it leaks into rates and freight. Fresh US–Iran strikes on Gulf bases left WTI near just $70, yet the second-order channels are pricing the conflict: JGBs fell on the oil-inflation read into faster BOJ hikes, Maersk lifted full-year guidance by at least $1 billion as US tariffs front-load China freight, and China is emerging from the energy crisis with stockpiles intact and deepened buyer dependencies. Spot oil prices the ceasefire; rates, shipping and EM terms of trade price the mines.
• Smart money is rotating within the AI cohort, not out of it — selling the index leaders to fund the memory supply chain and the EM that crude relief backstops. Goldman Sachs told clients to "stick with the winners," staying overweight North Asia and adding commodities, while RBC lifted its S&P 500 target to 8,150 and Goldman's David Snider sees 22% second-quarter EPS growth — even as permabears Jeremy Grantham and Michael Burry warn of a 70% crash. India quietly reclaimed the world's fifth-largest market cap at $5.04 trillion, overtaking Taiwan and South Korea as the rotation favored the market crude relief and domestic flows shelter.

Potential Alpha:

• RATESSub-3W — Long XLF (Financial Select Sector SPDR ETF) against long-duration QQQ (Invesco QQQ Trust) as the Warsh-led Fed's 64% September hike probability and the dollar's strongest month in a year reprice rate-sensitive multiples into the July 2 payrolls print.
• [AI_CAPEX] Longer (3–6 months) — Long the HBM-memory supply chain via EWY (iShares MSCI South Korea ETF) and EWT (iShares MSCI Taiwan ETF) on the $518 billion Korean chip megaproject and the memory upcycle led by East Asia, paired against the mega-cap index leaders the leverage unwind is deflating.
• EMSub-3W — Long INDA (iShares MSCI India ETF) on India reclaiming the fifth-largest market-cap spot, where easing crude and domestic-institution buying backstop the tape against the foreign-outflow wave hitting Korea and Taiwan.

Catalysts — Next 48-72H: