Macro Overview Archive

Abundant liquidity continues to support risk assets, but equity markets are consolidating at peak levels while volatility surges, creating conditions for potential regime transition.

Two of three macro pillars remain aligned bullish - Liquidity expanding and Risk Appetite risk-on, but the Real Economy has downgraded from Strengthening to Neutral as jobless claims rise sharply and consumer sentiment holds at a 5-year low. The volatility complex has exited Elevated Fear, with oil volatility dropping 23% over four weeks. Equities and credit are near 5-year highs; the labour market and consumer confidence are sending the opposite signal.

Markets are operating in a three-way bullish alignment for the third consecutive week, but consumer sentiment has deteriorated to a 5-year low, cross-asset signals have stepped back from Risk-On to Neutral, and the volatility complex remains in Elevated Fear — cracks are forming beneath an otherwise supportive regime.

Markets are operating in a rare triple-alignment bullish regime where accommodative liquidity, equity-driven risk appetite, and economic expansion are all reinforcing each other - but the volatility complex has shifted to Elevated Fear this week as bond and oil volatility jump, creating a meaningful crack in the otherwise supportive picture.

All three macro pillars are aligned bullish for the first time in months, creating the strongest coordinated signal for risk assets seen this year — but extreme positioning across markets makes this strength vulnerable to sudden reversals.

Markets are running on pure liquidity momentum with equity gains pushing all major indices to 5-year highs, but fiscal policy is draining the punch bowl just as positioning becomes increasingly one-sided across risk assets and commodities.