Journal ·
Monday, 29 June 2026
Regime Risk-onMarket regime
Risk-on prints for the seventh consecutive read (n=7), holding the call from the prior published entry on 26 June 2026. The rate complex did the work this session: the 10Y fell 8bps to 4.38% and the 2Y dropped 12bps to 4.07%, the front end leading the way down, so the 10Y–2Y spread widened 4bps to 0.31% a bull-steepening rather than a flatten. Inflation expectations cooled alongside: the 10Y breakeven eased 5bps to 2.20% and the real 10Y came in 3bps to 2.18%, nominal, breakeven, and real all pulling lower together. VIX eased into the calm tag at 17.65. Breadth above the 50-day EMA reads 62.1% (607/977), a clean healthy print. SPY closed 740.86, +7.7% over its 200-EMA (687.72), still extended. The wrong-way leg is the familiar one: HY widened 17bps to 2.83%, the session's largest single macro move and the spread that keeps demanding attention.
Key numbers
| Metric | Level | Read |
|---|---|---|
| Regime | Risk-on | Seventh consecutive print (n=7), continuation from 06-26 read |
| VIX | 17.65 | Calm tag |
| Breadth >50-day EMA | 62.1% (607/977) | Healthy |
| SPY close | 740.86 | +7.7% vs 200-EMA (687.72) |
| 10Y Treasury | 4.38% | week over week −8bps |
| 2Y Treasury | 4.07% | week over week −12bps |
| 10Y–2Y spread | 0.31% | week over week +4bps, steeper |
| 10Y breakeven | 2.20% | week over week −5bps, disinflating |
| Real 10Y rate | 2.18% | week over week −3bps |
| HY credit spread | 2.83% | week over week +17bps, wider, leg to watch |
| Fed Funds | 3.63% | as of 1 May 2026 |
| Initial claims | 215K | week over week −12K (as of 20 June 2026) |
| Unemployment | 4.3% | as of 1 May 2026 |
| Nonfarm payrolls | 159.0M | as of 1 May 2026 |
| Housing starts | 1,177K | as of 1 May 2026 |
Regime assessment
With nominal, breakeven, and real yields all stepping lower together, the duration headwind that gated the most stretched multiples has loosened, and a steepening curve is the friendlier version of that move for momentum. The constructive tell is participation: a clean healthy breadth tag says the advance is broad, which argues for holding cluster-confirmed leaders over reaching for the single narrowest extension. The caution lives in credit, not rates. HY drifting wider again is the input that says size with restraint even while the absolute level is still tight, though a calm VIX keeps a vol gate off the stack. Net: lean constructive, let credit set the sizing ceiling while the rate tape now an outright tailwind earns conviction on the names already working.
What would change the call
- HY at 2.83% after a +17bps week is the leg to watch; continued widening removes the cleanest confirm and drags the read toward neutral.
- Breadth at 62.1% is healthy but not commanding; participation slipping under 50% flips the regime faster than any single macro print.
- VIX carries the calm tag at 17.65; a reversal higher converts a contained vol tape into a vol regime.
- The 2Y reversing higher and re-flattening the 0.31% spread, or the real 10Y firming back above 2.18%, hits the longest-duration narratives first.
What to watch
- Next CPI against a 2.20% breakeven: the disinflation read is the constructive input, and a hot print reverses it while pushing the real rate the wrong way for momentum multiples.
- Next payrolls and claims: claims at 215K (−12K week over week, as of 20 June 2026) is a firm labor signal; the open question is whether the 159.0M payroll trend and 4.3% unemployment hold into the next print.
- The HY path from 2.83%: whether this week's +17bps is noise or the start of a credit re-rate is the fastest route to handing the regime back.
- Fed path against a 3.63% funds rate, with the curve at 0.31% as the market keeps pricing cuts the Fed hasn't delivered.
Status
Risk-on since 18 June 2026; consecutive print #7 in the journal, continuation of the prior published read on 26 June 2026. Research only no positions, sizes, entries, stops, or P&L.