JPM JPM US MACRO THEMA

Specialist Sales US Specialist Sales JPMORGAN 03 August 2026

JPM | US MACRO THEMATICS - Market Buo(YEN)cy Marissa Gitler US Thematics focuses on key macro views, market debates, and favored investment themes.

Geopolitical/Crude noise continues: >5% drawdown sounds overzealous, but range-bound $75-90 view still intact, with crude vol compression near-term but re-escalation remaining a cheap tail hedge

Rates are still a key risk transmission mechanism for markets: Unprecedented US-Japan JPY coordination matters insofar as it (ideally) keeps UST selling pressure contained. The bond market is now setting financial conditions, and that has the capacity to weigh on long-duration growth.

Semis/Momentum flush was positioning-driven but macro can’t be fully absolved: Strong earnings-implied CAPEX and a cleaner positioning setup is supportive for Momentum, but longer-term elevated positioning amidst bond vol means the trade isn’t yet an unequivocal buy

Market narratives continue to go in circles (on/off Middle East tension, on/off momentum scare, on/off yen intervention being negative)

The weekend brought another US-Iran "deal on the way” amidst a lack of US airstrikes, which is healthfully weighing on crude markets. We've seen this un-resolved play before, so while a >5% drawdown in crude is certainly welcome, it appears somewhat overzealous. The prevailing explanation is that this is a knee-jerk reaction to revoking “risk of damage to critical energy infrastructure.” I continue to believe the best way to think about crude right now is that it will oscillate in a higher ($75-90) range for the forseeable future. This is enough to apply moderate inflation pressure, but not quite the same risk as earlier this year when the market was dealing with a fully blocked Strait and oil inventories moving towards what looked to be dangerous minimums; leakage through the Strait continues as the global oil cushion is appearing more resilient than initially expected thanks to SPRs and China.

Yen Intervention: Why is the US involved? While Middle-East updates remain front and center, the more important story to be following is what's going on in currency markets as the US and Japan are coordinating to intervene in JPY. For those less familiar with yen intervention, what’s taking place right now is a historic and unprecedented way to go about this, marking the first coordinated intervention since 1998. If I had to take a logic-based approach to what’s going on here, and specifically why the US is involved, while the Fed anchors short rates globally, it's the Bank of Japan that has historically exerted the most influence over the long end of the curve. As the BoJ's grip on its own long-end loosens, the ripple effects can be felt acutely in US duration when treasuries are sold to defend the Yen. This ends up feeding through to US financial conditions, so there is an incentive for the US to help contain the Japanese long-end. But why now? Because long-end pressure domestically got ostensibly worse after Warsh’s very opaque

Specialist Sales US Specialist Sales JPMORGAN 03 August 2026

Fed meeting last week.The natural release valve for the yen is a weaker dollar, which effectively caps how far long-end yields can run by making US assets more attractive to foreign buyers at the margin. The elegant part of this dynamic is that a modest yen strengthening doesn't need to be large enough to fully unwind the carry trade, it just needs to be controlled enough to blunt the constant need for intervention. A softer dollar alongside a slightly firmer yen is actually a net positive for risk assets, removing the tail risk of a disorderly carry unwind while simultaneously providing a fresh positive catalyst for US equities through the weaker dollar channel. To wit, my APAC Thematics colleague Matt See noted that while moves in the yen have been sharp, it’s unlikely we see a repeat of the July/Aug 2024 carry unwind episode (here). Much in line with this thinking, it seems of no coincidence that over the weekend, Bessent was outwardly supportive of Japan’s use of the Foreign and International Monetary Authorities Repo facility. This allows overseas CBs to use their treasury…