Flow And Positioning Observations

This report provides daily market observations, noting a hawkish FOMC surprise, the emergence of highly capable small-scale AI models, and shifts in hyperscaler spending dynamics.

Key Takeaways

• 1.The June FOMC meeting surprised markets with a hawkish tilt, featuring nine participants projecting rate hikes in 2026 and an upward revision to 2027 inflation forecasts.
• 2.Advancements in AI models, specifically local/open-source compression like VibeThinker-3B, suggest that reasoning tasks may be increasingly performable on smaller, cheaper edge devices.
• 3.Hyperscalers face a potential reflexivity loop where continued massive capex spending vs. token price compression could lead investors to punish firms that do not signal a slowdown.

Table of Contents

• GS flow and positioning observations
• Richard Privorotsky – EMEA head 1D trading
• Ariana Contessa - US sales trading

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