The Tanker War Vindicates the Tail, and the Yen Short Pays

Scorecard: Last Week's Calls

Leading with the wins.

Oil, hold the long-dated call tail, higher conviction on the hedge than the fade (Low on fade): Correct, and the tail paid hard. Brent broke the $95 re-arm line and ran to about $97 on the tanker war, exactly the shock the tail insures (TradingEconomics, 7 September). We flagged "Brent above $95: hold the tail, stop selling rips," so the low-conviction fade was correctly fenced.
Short USD/JPY toward 150, small, contrarian (Medium): Correct and paying. The pair fell from about 159.4 to near 153.5 as BoJ September hike bets rose and intervention talk grew (FXStreet, 8 September; CNBC, 3 September).
Cut front-end (2 to 5 year) duration into hike risk (Medium): Correct. The 2-year sold off further to about 4.37% after the hot payroll, so owning less front-end duration was the right side (StreetStats, 4 September; CNBC, 4 September).
Dollar neutral-to-firm, no fresh short below DXY 98, revisit long above 102 (flip): Correct. DXY held the 98 to 102 band, ending near 99.3 (TradingEconomics, 7 September).
Constructive GBP above 1.34, cautious gilts (Low): Correct on both legs. Cable held about 1.354 and the 10-year gilt stayed heavy near 5.16%, close to 19-year highs (TradingEconomics, 8 September; TradingEconomics, 7 September).
Neutral-to-small-long AUD, buy dips toward 0.70 (Medium): Correct and validated. Q2 GDP beat at 0.4% q/q and 2.1% y/y, lifting RBA September hike odds and underpinning the Aussie near 0.714 (ABS via Investing.com, 2 September).
Overweight IG, underweight HY, scale in only past 3.25 to 3.5% OAS (Medium): Correct and untriggered. HY OAS tightened to about 2.65%, still far inside the scale-in line (FRED/ICE BofA, 3 September).
Energy as a hedge, do not fight mega-cap AI (equities): Correct. Energy led on oil, and Broadcom posted record revenue up 86% with AI chip sales up 221%, confirming the capex cycle is intact (CNBC, 2 September).

Now the mixed and the misses, plain.

Gold core long, add toward $4,300, trim above $4,700 (Medium): Correct on posture. We stopped pressing and gold drifted lower to about $4,405, never hitting the add line (TradingEconomics, 7 September). The cautious stance held; the structural long lost a touch.
Long the ECB hike via front-end rates, small EUR/USD short (Medium rates, Low FX): Mixed. The rate thesis is intact into a near-certain 10 September hike, but EUR/USD sat flat near 1.162, so the small short earned nothing (TradingEconomics, 7 September; Reuters via FXStreet, 3 September).
India, structurally long, Nifty base case 23,900 to 24,500, trim only above 96.5 USD/INR (Medium): Mixed, and the index range broke. The Nifty slipped to about 23,687, its lowest since 24 July, as Brent near $100 hit sentiment; the rupee call was right, firming to about 94.5, nowhere near 96.5 (Bloomberg, 8 September; TradingEconomics, 8 September).
Middle East, base case 55% contained tit-for-tat, Brent $85 to $95: The base range was wrong; the tail we owned paid. Escalation ran to the downside scenario, with the US striking three Iranian tankers and Iran hitting US warships and Gulf bases (CNN, 5 September; Al Jazeera, 6 September).

Too early to grade.

Contrarian, the Fed holds on 15-16 September; buy the 2-year near 4.35% for a hold (Low): Too early. The FOMC has not met; the 162k payroll pushed hike odds back toward 58% (CME FedWatch via CoinDesk, 7 September).

Hit rate: eight clean or tracking wins, three mixed, one wrong base case that the hedge covered, one too early. The stars were the oil tail and the yen short. The weak spots were the euro FX leg and the Indian index floor.

Key Levels Dashboard

US cash markets were shut Monday 7 September for Labor Day, so US instruments use the Friday 4 September close or 8 September intraday where noted.

Brent crude, ~$97/bbl, up ~8% on the week. Broke $95 to a near three-month high as the US and Iran traded tanker strikes (TradingEconomics, 7 September).
WTI crude, ~$92/bbl, up ~6% on the week. Tracked Brent higher on Hormuz supply risk (TradingEconomics, 8 September).
Gold spot, ~$4,405/oz, down ~1% on the week. Drifted lower on rate-hike bets and a firm dollar despite the war premium (TradingEconomics, 7 September).
Silver spot, ~$65.9/oz, down ~1% on the week. Slipped with gold as yields firmed (FXStreet, 7 September).
Federal Reserve funds target, 3.50-3.75%, unchanged. A hike is near 58% priced; next decision 15-16 September (CME FedWatch via CoinDesk, 7 September).
ECB deposit rate, 2.25%, unchanged. A 25bp hike to 2.50% is fully priced for 10 September (Reuters via FXStreet, 3 September).
BoE Bank Rate, 3.75%, unchanged. Next decision 17 September (Bank of England).
RBA cash rate, 4.35%, unchanged. September hike odds rose to about 57% after Q2 GDP; next decision 28-29 September (Investing.com, 2 September).
RBI repo rate, 5.25%, unchanged. Next decision late September or early October (RBI).
Latest US jobs print, August +162k, unemployment 4.1%. A blowout versus the 53k consensus, with June and July revised up (BLS, 4 September).
S&P 500, ~7,719, up ~0.4% on the week. Fell Friday on the hot jobs print after a mid-week Waller-driven bounce (CNBC, 4 September).
US 2-year Treasury, ~4.37%, up ~4bp on the week. Front end repriced for the hike risk (StreetStats, 4 September).
US 10-year Treasury, ~4.78%, roughly flat on the week. Touched its highest since November 2023 intra-week, then eased on Waller (TradingEconomics, 8 September).
US 30-year Treasury, ~5.25%, roughly flat on the week. Held near multi-year highs into the buyback start (StreetStats, 4 September).
DXY, ~99.3, roughly flat on the week. Dipped to a two-week low on Waller, then rebounded on the jobs beat (TradingEconomics, 7 September).
EUR/USD, ~1.162, roughly flat on the week. Held just above 1.16 into the ECB (TradingEconomics, 7 September).
GBP/USD, ~1.354, roughly flat on the week. Held above 1.34 near a two-week low (TradingEconomics, 8 September).
AUD/USD, ~0.714, roughly flat on the week. Anchored by the GDP beat and firm RBA pricing (Investing.com, 2 September).
USD/INR, ~94.5, rupee up ~0.6% on the week. RBI inflows and intervention drove a two-month high for the rupee (TradingEconomics, 8 September).
USD/JPY, ~153.5, yen up ~3.7% on the week. Fell to a multi-month low on BoJ hike bets and intervention talk (FXStreet, 8 September).
Nifty 50, ~23,687, down ~1.6% on the week. Lowest since 24 July as oil near $100 pressured sentiment (Bloomberg, 8 September).
US HY OAS, ~2.65%, tighter ~8bp on the week. Still deep inside the scale-in trigger (FRED/ICE BofA, 3 September).

Executive Summary

The geopolitics did the work this week. What was a slow financial squeeze one week ago is now an open shipping war. After the US struck Iranian minelaying forces on Larak Island on 30 August, the fight moved to sea: the US hit two Iranian government tankers on 1 September under a new "tanker for tanker" policy, Iran fired at US warships and Gulf bases, and on 5 September the US destroyed or disabled three more Iranian tankers near Kharg Island and Jask (Axios, 1 September; CNN, 5 September). Brent broke our $95 re-arm line and ran to about $97, near a three-month high, with Bloomberg reporting oil "near $100 a barrel" (TradingEconomics, 7 September; Bloomberg, 8 September). This is the downside scenario we sketched last week, and the cheap long-dated call tail we carried while nothing happened is now firmly in the money. Per our own threshold, a tanker hit flips that tail to a core long. We make the flip.

The US macro story split down the middle. August payrolls printed a hot 162k against a 53k consensus, with June and July revised up, which on its own argues for a hike (BLS, 4 September). But mid-week, Governor Christopher Waller told Reuters, "If this continues in the data due over the next two weeks, I would be inclined to support holding the target for the federal funds rate at its current setting," and hike odds fell about 12 points to 54.6% on the comment (CNBC, 3 September). Core inflation is drifting lower. The result is a genuine coin flip: CME FedWatch sits near 58% after the jobs print, essentially where it was after Warsh's Jackson Hole speech, and the smart money has not chased the number (CoinDesk, 7 September). Our contrarian hold call is alive but not winning yet. The August CPI on 11 September settles it: consensus looks for headline near 3.4% and core easing to about 2.4% (Deutsche Bank preview via ZeroHedge, 8 September). A soft core hands the doves the meeting.

The yen was the cleanest win. USD/JPY fell from about 159.4 to near 153.5, and jumped over 2% on 3 September to touch 155.28, its strongest since 3 August "shortly after the U.S. and Japan staged a joint intervention to support the struggling Japanese currency on July 31" (CNBC, 3 September). BoJ Governor Ueda said the Bank "will debate raising interest rates including in September," and US Treasury Secretary Bessent pressed for "decisive" steps on the weak yen (Reuters via Yahoo Finance, 1 to 2 September). Our contrarian short is close to its 150 target. We take part of it off and trail the rest.

We reset the book: oil tail flipped to a core long, the yen short banked in part and trailed, front-end duration still light into a live FOMC, the contrarian 2-year hold kept small, gold core and patient, and the ECB-hike-plus-financials position run into 10 September.

Signal-Filter Takeaways for Clients

The regime variable flipped from the Fed's reaction function back to the Strait of Hormuz. A tanker war reprices oil, then inflation expectations, then rates, in that order. Own the oil exposure directly now rather than as insurance, because the disruption is happening, not threatened.
The Fed is a true 50/50 into 15-16 September, and the market knows it: hike odds barely moved on a blowout jobs print. Don't carry heavy front-end duration into that, but keep the small contrarian 2-year long, because the payoff on a hold is asymmetric.
The yen finally moved our way on fundamentals, not just intervention fear. Take profit into strength rather than pressing at target, because a BoJ hike that is largely priced can trigger a "sell the fact" bounce in USD/JPY.

01 Middle East: From Sanctions Squeeze to a Shooting War at Sea

What happened. The confrontation went fully kinetic and maritime. Following the 30 August Larak strikes, the US adopted a "tanker for tanker" policy, hitting two Iranian government tankers on 1 September, and on 5 September struck three more, the M/T Downy off Kharg Island, the M/T Stark 1 near Jask, and the M/T Kylo in the Gulf of Oman, after Iran fired ballistic missiles at a US carrier and destroyer (Axios, 1 September; CNN, 5 September). Iran's IRGC claimed hits on three oil tankers and three US-linked vessels, struck US bases in Jordan, Kuwait and Bahrain, and moved to declare a restricted zone near the strait (Euronews, 5 September; Al Jazeera, 6 September). Tehran said it was close to agreeing a tanker route through Hormuz with Oman, the one de-escalation thread (TradingEconomics, 7 September).

Why it matters. This is no longer a "sanctions, not supply" market. Ships are being sunk, a shadow fleet is being targeted, and the US is running a naval blockade that Iran is actively contesting. The tail we owned for weeks is the position that paid, and the base-case range we set at $85 to $95 was too calm. We were wrong on the range and right on the insurance, and the insurance is what pays the bills.

Scenarios

Base case, 50%: the tanker war grinds on, an Oman-brokered corridor limits but does not stop disruption, Brent holds $95 to $105.
Downside for prices, 30%: a formal Hormuz closure or a major tanker sinking with casualties, Brent through $110.
Upside for prices, 20%: a US-Iran maritime understanding via Oman, Brent back toward the high $80s.

What to watch. Whether Iran formalises the restricted zone, the pace of tanker losses, and the Oman corridor talks.

House view. Flip flagged. We convert the long-dated oil call tail to a core long, drop the sell-the-rip fade, and hold it as our primary geopolitical expression. High conviction.

02 Energy Markets: Brent Breaks $95, the Chokepoint Wins

What happened. Brent cleared the $95 re-arm line and ran to about $97, its highest since July, with WTI near $92 (TradingEconomics, 7 to 8 September). OPEC+ met on 6 September and, as its core seven had signalled, made no change to October policy, needing to set 2027 baselines before any further unwind, having completed the 1.65 million bpd rollback in September (Reuters via WMBD, 6 September; OPEC, 2 August). The US Strategic Petroleum Reserve fell about 3.1 million barrels to 286.6 million as of 28 August, its lowest since November 1982, and China cut crude imports, both capping the rally at the margin (Reuters, 31 August; TradingEconomics, 7 September).

Why it matters. The supply side is not the story now; the chokepoint is. A supplied market with a contested strait can still gap higher on any strike, and it has. Our mid-$80s gravity call is suspended while the war premium is live. The right posture switched from fading rips to owning the disruption.

Scenarios

Base case, 50%: Brent oscillates $95 to $105 as war premium meets weak Chinese demand and drained buffers.
Downside for prices, 30%: an Oman corridor deal, Brent toward the high $80s.
Upside for prices, 20%: strait closure or a tanker sinking, Brent above $110.

What to watch. The Oman route talks, US SPR headlines, and any confirmed strait closure.

House view. Long via the oil call tail turned core long; energy equity as a secondary hedge. High conviction on the length, and we no longer sell rips.

03 United States: A Hot Jobs Print Meets a Dovish Waller

What happened. August payrolls jumped 162k, triple the 53k consensus, with unemployment steady at 4.1% and prior months revised up, the strongest gain since March (BLS, 4 September). Yields rose and stocks fell on the print, but two days earlier Governor Waller told Reuters he would be "inclined to support holding the target for the federal funds rate at its current setting" if disinflation continues, knocking hike odds to 54.6% (CNBC, 3 September). Hike odds sit near 58% after the jobs beat, roughly unchanged from the post-Warsh level, so the print did not move the smart money (CoinDesk, 7 September). Treasury's expanded long-bond buybacks are set to begin 9 September. August CPI lands 11 September, with consensus near 3.4% headline and about 2.4% core (Deutsche Bank preview via ZeroHedge, 8 September).

Why it matters. The hawkish tone and a hot labour print pull one way; a dovish governor, sub-2% trend growth and easing core inflation pull the other. That is the gap our contrarian hold exploits. A new chair hiking into a divided committee with a soft core print would be a stretch, and Waller has now given the doves a name and a vote.

Scenarios

Base case, 50%: the Fed holds on 15-16 September, front-end yields fall from the hawkish overshoot.
Downside, 35%: a hot core CPI on 11 September tips a 25bp hike, the 2-year pushes toward 4.5%.
Upside, 15%: a soft CPI and dovish guidance rally the whole curve.

Market implications

Asset class: Keep front-end duration light into the decision; hold no steepener while the curve stays flat.
Currency and flows: A 50/50 Fed and a firm-ish dollar keep DXY rangebound in the high 90s.
Sector rotation: Energy is the sector that works with oil and yields up; long-duration growth has no cushion into the print.
Entry and exit: Contrarian, buy the 2-year near 4.37% for a hold; add long-end only above a 4.85% 10-year.

What to watch. August CPI on 11 September and the buyback tone from 9 September.

House view. Contrarian, we hold that the Fed keeps rates unchanged on 15-16 September and keep the small 2-year long, while running light front-end duration in case we're wrong. Low conviction on the hold, Medium on the duration stance.

04 Europe: The Hike Lands, the Euro Goes Nowhere

What happened. The ECB is set to raise the deposit rate 25bp to 2.50% on 10 September, with all 65 economists in the Reuters poll expecting the move, in what would be its shortest hiking campaign since 2011 (Reuters via FXStreet, 3 September; Reuters via Euronext, 3 September). Euro-area inflation rose to 3.3% in August, above the ECB's 2% target, and the Bank is widely expected to stop after this hike (Reuters, 3 September). EUR/USD held flat near 1.162 (TradingEconomics, 7 September).

Why it matters. The rate leg is a Frankfurt story that supports financials; the currency is going nowhere because the ECB is signalling this is the last hike while the Fed is still a coin flip. Our small EUR short earned nothing and our rate call is on track. We keep the rate position and drop the FX leg to neutral.

Market implications

Asset class: Own the ECB hike via front-end euro rates; it's close to fully delivered.
Currency and flows: Neutral EUR/USD; no edge with both sides near their terminal narratives.
Sector rotation: Overweight European financials into and just past the hike.
Entry and exit: Take the rate position toward the meeting; no fresh EUR directional bet.

What to watch. Lagarde's guidance on 10 September and whether the projections read hawkish or dovish.

House view. Long the ECB hike via front-end rates and European financials; EUR/USD neutral, flip flagged from small short. Medium conviction on rates.

05 United Kingdom: Pound Holds, Gilts Stay Heavy, Budget Looms

What happened. Cable held above 1.34 near a two-week low at about 1.354, while the 10-year gilt stayed heavy near 5.16%, close to 19-year highs, ahead of Chancellor Healey's first major fiscal speech and the autumn Budget (TradingEconomics, 8 September; TradingEconomics, 7 September). UK firms lifted full-time hiring in August for the first time in four years, but house prices fell year-on-year for the first time since November 2023, on Lloyds data (TradingEconomics, 7 September).

Why it matters. Sterling again held its range against a firm dollar where the euro couldn't, so the pound stays the cleaner expression than the bond. Heavy gilts and an unresolved fiscal path keep us off UK duration until the Budget sets the numbers.

Market implications

Asset class: Cautious on gilts into the Budget and a global long end near multi-year highs.
Currency and flows: Constructive GBP above 1.34, though dollar firmness caps upside.
Sector rotation: No fresh call.
Entry and exit: Add cable dips toward 1.34; fade rallies toward 1.37.

What to watch. The 17 September BoE decision and the run-up to the autumn Budget.

House view. Constructive GBP above 1.34, cautious gilts. Low conviction, unchanged.

06 Australia: GDP Beat Cements the Hawkish Lean

What happened. Q2 GDP rose 0.4% q/q and 2.1% y/y, both above consensus, lifting the implied September RBA hike probability to about 57% from 48%, with a November move more than fully priced (Investing.com, 2 September; ABS, 2 September). Trimmed-mean inflation is stuck at 3.6% and growth is running above the RBA's ~2% speed limit. AUD/USD held near 0.714.

Why it matters. Growth above potential plus sticky core inflation keep the RBA leaning to tighten, which underpins the currency and validates buying dips rather than chasing. Higher oil now feeds fuel inflation, an extra hawkish channel.

Market implications

Asset class: Rates biased restrictive, with a hike the more probable next move.
Currency and flows: Neutral-to-small-long AUD.
Sector rotation: No fresh call.
Entry and exit: Buy AUD dips toward 0.70, trim toward 0.725.

What to watch. The 28-29 September RBA decision and oil's pass-through to fuel.

House view. Neutral-to-small-long AUD, buy dips; a hawkish RBA supports the tilt. Medium conviction, unchanged.

07 India: Oil Breaks the Floor, Rupee Holds the Line

What happened. The Nifty fell to about 23,687, its lowest since 24 July, breaking below the 23,900 floor we set as oil neared $100 and FII sentiment soured (Bloomberg, 8 September). The rupee, though, firmed to about 94.5, a two-month high, on RBI inflows topping $136 billion and steady intervention, keeping USD/INR far from our 96.5 trim line (TradingEconomics, 8 September).

Why it matters. The index broke on an external oil shock, not a domestic one, and the rupee, which is our actual trim trigger, moved the right way. The structural long survives, but Brent near $100 is a live headwind for an oil importer, so we stagger rather than add aggressively and lower the range.

Scenarios

Base case, 55%: the Nifty consolidates 23,400 to 24,200 while oil stays elevated.
Downside, 30%: Brent above $105 and a Fed hike pull the index and rupee lower together.
Upside, 15%: an Oman oil corridor cools crude and the index reclaims 24,200.

Market implications

Asset class: Structurally long large-cap IT exporters and financials.
Currency and flows: Rupee firm and far from 96.5; oil is the swing factor.
Sector rotation: Add financials on weakness; hold IT, which benefits from a weaker rupee if it comes.
Entry and exit: Stagger entries, trim only if USD/INR breaks 96.5.

What to watch. Brent, the late-September RBI decision, and USD/INR versus 96.5.

House view. Stay structurally long Indian large-cap IT and financials, lower the Nifty range to 23,400 to 24,200, trim only above 96.5. Medium conviction, unchanged.

08 Precious Metals and Safe-Haven Assets

What happened. Gold drifted lower to about $4,405 and silver to about $65.9, both pressured by rate-hike bets and a firm dollar even as the war premium built (TradingEconomics, 7 September; FXStreet, 7 September). China's central bank extended its gold-buying streak to a 22nd straight month in August, lifting holdings to 76.73 million fine troy ounces, a structural bid under the market (TradingEconomics, 7 September).

Why it matters. Gold is caught between two forces: a real war premium and a real-yield headwind from a possible Fed hike. That standoff is why it's drifting, not breaking. Our patient, core-and-smaller stance is the right one, and central-bank buying keeps the floor firm.

Market implications

Asset class: Core long gold, smaller silver, still no pressing at the highs.
Currency and flows: A firm dollar and high real yields cap the near-term upside.
Sector rotation: No fresh call.
Entry and exit: Add gold toward $4,300, trim above $4,700; add silver only on deeper pullbacks.

What to watch. August CPI, the FOMC, and real yields.

House view. Keep a core structural gold long, add on weakness toward $4,300. Medium conviction, unchanged.

09 Sovereign and Credit Conditions

What happened. HY OAS tightened to about 2.65%, still historically tight, even as the risk-free curve held near multi-year highs and oil surged (FRED/ICE BofA, 3 September). The 30-year sat near 5.25% into the 9 September start of Treasury's expanded buybacks (StreetStats, 4 September).

Why it matters. Spreads this tight into a rising-oil, coin-flip-Fed backdrop leave no cushion. If the Fed hikes or a tanker sinking sends Brent through $110, all-in yields rise and tight spreads mean price pain with little carry protection. We stay up in quality; the scale-in trigger is nowhere close.

Market implications

Asset class: Overweight IG, underweight HY.
Currency and flows: No fresh call.
Sector rotation: Favour higher-quality, shorter-spread-duration credit; energy issuers benefit from higher oil.
Entry and exit: Begin HY scale-in only past 3.25 to 3.5% OAS.

What to watch. Whether spreads finally widen if the Fed hikes or Brent breaks $105.

House view. Overweight IG, underweight HY, no scale-in yet. Medium conviction, unchanged.

10 Other Flashpoints

Japan and the yen: USD/JPY fell to about 153.5 as BoJ Governor Ueda said the Bank "will debate raising interest rates including in September" and Bessent pressed for "decisive" steps on the weak yen into the 17-18 September meeting (FXStreet, 8 September; Reuters via Yahoo Finance, 1 to 2 September). Our short is near its 150 target; we bank part and trail the rest. Medium conviction.
US-China: Xi's Washington visit is still slated for 24 September but Beijing has not formally confirmed, and the Busan tariff truce that expires in November is expected to be extended (CNBC, 2 September; SCMP, 28 August). The summit is framed as low-expectations, managing the stalemate rather than resolving it.
AI concentration: Broadcom posted record revenue up 86% to $29.6bn with AI chip sales up 221% to $16.7bn, and guided Q4 AI revenue to $21.7bn, confirming the capex cycle even as the stock traded flat on high expectations (CNBC, 2 September). We don't fight the mega-cap leaders.
US midterms: 3 November, a rising fiscal and political catalyst; no new development this week.
Ukraine-Russia and cyber: No genuinely new flashpoint worth adding this week.

Upcoming Events and Catalyst Calendar

9 September, Treasury expanded buybacks begin. The long-end cap that failed to hold in August goes live.
10 September, ECB decision and projections. Our owned September-hike call is graded here.
11 September, US August CPI. Consensus near 3.4% headline, 2.4% core; this settles the FOMC.
15-16 September, FOMC. A hike is near 58% priced; our contrarian hold call is graded here.
17 September, BoE decision. Our sterling and gilt views are tested.
17-18 September, BoJ meeting. A hike validates the short-yen thesis.
24 September, possible Xi visit to Washington, unconfirmed by Beijing.
28-29 September, RBA decision. The hawkish-hold-versus-hike call is tested.
30 September, US fiscal year end and Q2 GDP third estimate. Shutdown risk and the growth path.
2 October, US September payrolls.
Late September or early October, RBI decision.
Mid-October, US September CPI.
28 October, UK autumn Budget. The fiscal event that keeps us cautious on gilts.
28-29 October, FOMC.
3 November, US midterms.
November, Busan US-China tariff truce expiry.

Recommendations (Staged)

Immediate, oil: Flip the long-dated call tail to a core long and drop the sell-the-rip fade. Direction: long. Trigger already met: US and Iran struck tankers and Brent broke $95. Horizon: through the tanker war.
Immediate, Japan: Bank roughly half the short USD/JPY into the move to 153.5 and trail the rest toward 150. Cut fully above 161. Trigger: the 17-18 September BoJ meeting.
Immediate, rates: Keep front-end duration light into 15-16 September. As a contrarian overlay, hold a small 2-year long near 4.37% for a Fed hold; add long-end only above a 4.85% 10-year. Trigger: the 11 September CPI.
Immediate, gold: Keep a core long, smaller size, add on weakness toward $4,300; trim any bounce above $4,700. Horizon: three months.
Near-term, Europe: Hold the ECB-hike-via-front-end position and European financials into 10 September; run EUR/USD neutral.
Near-term, UK: Keep the constructive GBP tilt above 1.34, add dips toward 1.34; stay off gilts into the autumn Budget.
Near-term, Australia: Keep neutral-to-small-long AUD, buy dips toward 0.70, trim toward 0.725.
Structural, India: Stay long large-cap IT exporters and financials, stagger entries, lower the Nifty range to 23,400 to 24,200, trim only if USD/INR breaks 96.5.
Structural, credit: Overweight IG over HY; begin HY scale-in only past 3.25 to 3.5% OAS; watch for widening if the Fed hikes or Brent breaks $105.

Thresholds That Change the Calls

Formal Hormuz closure or a tanker sinking with casualties: add to the oil core long, Brent toward $110 plus.
Oman corridor deal that restores flows: trim the oil long, expect Brent back toward the high $80s.
Fed hikes 25bp on 15-16 September: cover the 2-year long, extend the front-end cut, add to the dollar and to gold weakness.
Fed holds on 15-16 September: the contrarian call pays, front-end yields fall, press the 2-year long.
Hot August core CPI above 2.6% on 11 September: the hold thesis weakens, cut the 2-year long.
10-year above 4.85%: add long-end duration.
USD/JPY toward 150 or a BoJ hike: take the rest of the yen short profit; above 161 with no BoJ move, cut it.
HY OAS past 3.25 to 3.5%: begin HY scale-in.
Gold below $4,300: add to the core long; above $4,700, trim.
USD/INR breaks 96.5: trim the India tilt.

Markers of Concern

Levels are a dated snapshot, mostly the 4 September close or 7 to 8 September intraday; US cash markets were shut Monday 7 September for Labor Day.
Scenarios are probabilities, not forecasts.
The September Fed decision is a genuine coin flip; our contrarian hold can be wrong on a single hot core CPI print on 11 September.
The oil core long is now our largest geopolitical exposure and will hurt fast if Oman brokers a corridor and the war premium bleeds out.
The yen short is near target, so the risk is a "sell the fact" bounce in USD/JPY after a largely-priced BoJ hike.
Credit spreads near 2.65% offer no cushion if oil or the Fed forces all-in yields higher.